FXNET Daily Market Analysis - Australian Dollar Gains On Chinese Manufacturing Data

[FxNet]

The Australian dollar was the main mover in Monday’s Asian session as a result of data from China, which is Australia’s main trading partner.

Manufacturing PMI data from the world’s second largest economy showed that expansion in the manufacturing sector was steady at an 18-month high and eased concerns of a slowdown there which could affect the rest of the global economy.

The official Manufacturing PMI data which was released on Sunday was as expected and the private report from HSBC today was above forecast, with both being in expansionary territory.

Since China is a major trading partner for Australia, the news was positive for the Australian dollar. Also data that showed Australia’s building approvals were not as bad as expected helped lift the Aussie, up 0.5% in the Asian session against the USD to $0.9150.

The main news to look forward to later today will be Euro zone PMI data. The euro gained 0.11% against the dollar in Asia to 1.3601, moving closer to a one-month high of 1.3620 hit on Friday. The euro rose 0.06% against the yen to 139.31.

The dollar was steady at 102.41 yen, down 0.10% in the Asian session after hitting a 6-month high of 102.60 yen on Friday.

The main driver for the USD will be Friday’s US nonfarm payrolls data. US jobs data are closely watched by the Federal Reserve, as the data will play a part in determining when it can begin tapering.

 

[FxNet]

Asian Session – Yen strengthens on risk aversion over China concerns

Risk aversion led to a stronger yen while other major pairs drifted without clear direction as investors are taking on a cautious stance as concerns remain over a weakening Chinese economy after soft trade data earlier in the week. Also geopolitical tensions in Ukraine are weighing on market sentiment.

The only economic data releases today were from Australia. The Westpac report showed that consumer confidence in the country fell in March, extending its decline from a post-election peak in November.

The Australian dollar fell due to the domestic data as well as due to concerns over China, which is Australia’s major trading partner. Also Australia is a major producer of copper and iron ore, whose prices are tumbling recently. This is because copper is being used as collateral for loans in China, and with a slowing Chinese economy there are fears of defaults on these loans.

USDJPY opened the Asian session at 103.02 and came under pressure early as Asian markets started off on a nervous note (Nikkei went 2.4% lower) and Shanghai copper opening limit down. USDJPY eased to 102.78.

EURUSD opened the Asian session 1.3860 after another very quiet US session and traded a 1.3851/65 range. All of the market’s attention was on JPY and AUD pairs due to rising risk aversion sparked by China fears. Focus will turn to Euro zone industrial production data out later today although it is unlikely to have a large impact.

GBPUSD traded a tight range between1.6612-33 during the Asian session.

AUDUSD opened on Wednesday at 0.8977 and came under pressure early in the session due to soft Westpac consumer confidence numbers. Also weighing on AUD was falling copper and iron ore prices (Australia is a major exporter

 

[FxNet]

Forex Daily Analysis - 7 April 2014

EUR/USD kept on decliing in front of the non-cultivate payroll report. The euro keeps on traing
downwards after dovish remarks from ECB Director Draghi, who made no move yesterday yet talked
down expansion and offered signs that the Bank could add liquidity to the business sectors.
GBP/USD eased to trade at 1.6585 falling steadily since construction PMI missed expectations and the
US dollar continued to gain ahead of the NFP release due shortly. Sterling headed for the bottom of its
recent range against the dollar on Friday, hurt by a bullish week for the US currency and a couple of
marginally weaker than expected numbers on the British economy.

AUD/USD gave up 9 points to trade at 0.9283 remaining close to its record high the currency fell against
a strong USD and a minor data release from the ANZ jobs advertisements which slipped below last
month. It has been a slow trading morning with Chinese markets closed traders looked for any signs or
news.
USD/JPY is flat this morning ahead of the Bank of Japan meeting trading at 103.28 after steadily
declining last week against a strong greenback. Japan’s central bank will probably double purchases
of exchange-traded funds in a second round of monetary easing under Governor Haruhiko Kuroda
anticipated in coming months, a Bloomberg News survey of economists’ shows. The dollar remained
stronger following a three-week rally before the U.S. central bank releases minutes this week of the
Federal Open Market Committee’s March meeting.Leveraged funds boosted their bearish bets on the
U.S. currency to the most in almost four years last week, spurring speculation it will strengthen as some
of those positions are reversed.
Gold gained to trade at 1292.50 as traders begin to take positions prior to the non-farm payroll release
wid could send the US dollar soaring or just the opposite. Gold headed for a third weekly decline, the
longest run of losses since September, before a report forecast to show the fastest jobs growth in the US
in four months, supporting further reductions to monetary stimulus.