Forex Asia Review – China PMI lifts sentiment; yen weaker after Tankan data

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EURUSD opened the Asian session with a gap higher at 1.3358 and rose up to Friday’s high of 1.3375  in reaction to the much stronger than expected China PMI data that was released over the weekend.  The March PMI jumped to an eleven-month high showing that Chinese factory activity is strong, and therefore easing previous fears about a hard landing in the world’s second biggest economy.

 

AUDUSD opened at 1.0447, versus the Friday close of 1.0343, as the commodity-linked Australian dollar benefitted from news of a growing Chinese economy. China is Australia’s major trading partner and exports commodities there. AUDUSD eased to 1.0380on profit-taking later in the session. The focus turns to the Reserve Bank of Australia policy meeting tomorrow. Expectations are for rates to be kept on hold.

 

USDJPY gained in Asian trading, opening up at 83.00 and shot up to 83.29 after the China PMI data lifted risk sentiment and demand for the safe haven yen fell. Also, yen was weakened after disappointing Japanese data.  The Tankan index which showed a weaker-than-expected reading on business sentiment for big Japanese manufacturers, raised concern that the Bank of Japan may conduct additional monetary easing.

 

EURJPY tracked the USDJPY and also opened higher at 110.89 versus the Friday close of 110.52, edging up to a high of 111.12

 

GBPUSD was lifted by risk appetite, opening at 1.6022 and trading up to 1.6025 before falling back to 1.5979.
USDCHF opened lower at 0.9008, below the 0.9019 close on Friday before bouncing later to 0.9030. EURCHF was little changed in a range of 1.2035-44.