Forex Asia Review – Australian dollar rises after China PMI data

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The euro managed to edge up after a big drop yesterday against the dollar. EURUSD opened in Asia at 1.4358 and peaked at 1.4692 though the single currency could come under pressure later today after the release of several economic data on manufacturing in France, Germany and the Euro zone, which are all forecast to come out worse than previous. This could further concern investors that the euro zone debt crisis is affecting growth.

 

GBPUSD opened in Asia at 1.6450 with no significant moves in the session, climbing slightly to a high of 1.6485. Sterling is likely to take direction from the euro later today after the release of European economic data as there is lack of economic data from the U.K. EURGBP was flat and traded in a range between 0.8730 and 0.8714.

 

USDJPY opened Asia at 76.78 and closed at 76.73. Dollar yen has remained steady in the past few days as Japanese Finance Minister Yoshihiko Noda keep repeating that he is closely watching the markets and could intervene to curb yen strength. This deters investors from holding yen, but rather go long USDJPY. A large institutional buy order briefly lifter the pair to 76.92.

 

The Australian dollar rose against the U.S. dollar by around 80 pips in the session, opening at 1.0405 and peaking at 1.0463. The aussie gained momentum after the release of China PMI. The index of Chinese manufacturing came out higher than previous and was not as weak as some had feared. This is important since China is a major trading partner for Australia.

 

Gold continued to climb to hit another record high in the Asian session, surpassing $1,900 to peak at $1,911.82. Risk aversion still reigned in all markets pushing investors to move their funds into the safe haven investments to protect themselves against risk due to a sluggish U.S. economic outlook and euro zone debt.