Rishi Sunak was the focus of investors earlier in the week following his victory as the UK's new Prime Minister, which was seen to ease concerns about the economic outlook and stabilize markets.
Sunak became the UK's youngest prime minister, replacing the leadership of Liz Truss who was ousted after 6 weeks of her appointment due to her budget which had 'disrupted' the market.
The market reaction saw the pound rebound against the US dollar, where it had previously weakened following disappointing manufacturing and services PMI data.
Preliminary estimates for the manufacturing sector showed a sharp reduction in UK private sector output to a 29-month low, while services activity contracted for the first time in 20 months.
In addition, the UK stock market also showed improvement with the FTSE 100 up 0.6%, but underperformed the wider European market where the STOXX 600 rose 1.2%.
The 10-year UK government bond yield was down at 3.78%, supported by market expectations of Rishi Sunak's appointment.
Meanwhile, turning to the development of the US dollar, the currency king continued to maintain the decline recorded since Friday after being shown by a gloomy data reading.
Both the US manufacturing and services sectors were in contraction in October, seeing manufacturing activity decline to the weakest level since June 2020.
Meanwhile, the service sector also recorded a contraction after service providers reported the second biggest drop in output in almost two and a half years.
Against most major currencies, the dollar index, which measures the strength of the greenback, traded down 0.2% at around 111.75 in the Asian session.
