Key facts
- The euro rose 0.14% to $1.1201 and the pound edged up 0.1% to $1.3421 against the dollar.
- The dollar rose 0.37% against both the onshore and offshore yuan to 6.672 after China's central bank raised foreign currency reserve requirements.
- The Australian dollar fell 0.5% to $0.6963 after the RBA raised its cash rate by 25 basis points to 4.85% in a 6-3 vote.
- The dollar fell 0.3% to 0.8164 francs as Swiss annual inflation accelerated to its highest level in nearly three years in October.
- A senior Iranian official told Reuters that Iran and the US were far from reaching a deal to end the war.
The dollar eased on Tuesday, November 3, 2026, as investors weighed uncertainty over US-Iran tensions and US midterm elections, while the Australian dollar and China's yuan came under pressure after domestic policy moves, Reuters reported.
The euro rose 0.14% to $1.1201, the pound edged up 0.1% to $1.3421 and the Japanese yen was also a fraction stronger at 157.8 per dollar.
US midterm elections remain in focus, with polls and non-partisan analysts suggesting Democrats could retake the House of Representatives, while control of the Senate remains uncertain. Kit Juckes, head of FX strategy at Societe Generale, said: "The risk is domestic policymaking becomes more difficult ... if you can't agree anything when you're running a sizeable budget deficit and sizable spending, then the danger is you tighten fiscal policy, slow the economy and weaken the currency."
Investors are also watching the Gulf, where diplomatic efforts to prevent a renewed escalation in conflict after the US elections have helped push oil prices lower and weighed on the dollar in recent days. However, a senior Iranian official told Reuters on Tuesday that Iran and the US were far from reaching a deal to end the war.
The Swiss franc strengthened after annual inflation accelerated to its highest level in nearly three years in October, driven by a sharp rise in petrol prices. The dollar fell 0.3% to 0.8164 francs, while the euro slipped 0.2% to 0.9137 francs, its lowest level against the Swiss currency since June.
China's yuan weakened sharply after the central bank raised the amount of foreign currency that financial institutions must hold as reserves, a move seen by traders and analysts as an attempt to slow the currency's recent gains. The dollar rose 0.37% against both the onshore and offshore yuan to 6.672.
The Australian dollar fell 0.5% to $0.6963 after the Reserve Bank of Australia raised its cash rate by 25 basis points to 4.85%, as expected, but a split vote raised doubts about further increases. The central bank has raised rates by a total of 125 basis points this year. A narrower-than-expected 6-3 vote suggested policymakers may be nearing the end of the tightening cycle. Westpac analysts said: "The split vote has trimmed market RBA hike pricing, contributing to the move lower in (the Australian dollar)." They added: "The latest statement has also removed the line that the RBA is 'willing to increase the cash rate further if necessary' which suggests a more measured approach to hikes moving forward."
Other central banks due to announce policy decisions this week include those of Britain, Norway and Sweden.