Risk appetite dominated markets today boosted by good PMI data globally, beginning with China, euro zone, Germany, UK and US. Euro was lifted by better than expected manufacturing PMI for the euro zone in January, adding to signs that the region is beginning to stabilize. Meanwhile Portugal’s successful bond auction managed to lower borrowing costs for the indebted country. EURUSD soared to 1.3216 in New York trading, rising all day from an early European session low of 1.3025.
Sterling hit a two-and-a-half month high versus the dollar after a jump in January manufacturing PMI which rose to 52.1 from a previous 49.7. This is the highest level since May 2011 and eases concerns of the UK falling into a recession. GBPUSD soared to 1.58881 from a low of 1.5705.
USDCHF extended its decline in the US session to 0.9113 from 0.9161, the lowest level since December 1.
USDCAD fell to a three-month low of 0.9962 from 1.0047, as risk appetite benefitted the growth- sensitive Canadian currency. The focus turns to Canadian jobs data due on Thursday. The forecast is that more jobs were added in January than previous.
USDJPY bounced off a three-month low of 76.01 and retraced to 76.34 as investors feared the Bank of Japan may intervene in the currency market if yen got too strong.
AUDUSD rose to a three-month high of 1.0738, lifted by the positive Chinese PMI numbers. China is a major trading partner for Australia and so is affected by its economic situation. Also lifting the aussie were higher gold prices which rose to an eight-week high. Australia is a major gold producer.