Forex News Review – AUD dollar gains on good China PMI; euro steady as EU talks progress

Important: This page is part of archived content and may be outdated.

EURUSD gapped down in the Asian open to 1.3842 from the NY close on Friday at 1.3892 as the EU Summit over the weekend failed to produce any significant breakthrough. Talks were slow but there seemed to be some hope on bank recapitalization and the EFSF. “Work is going well on the banks, and on the fund and the possibilities of using the fund, the options are converging,” said French President Sarkozy. EURUSD bounced off a low 1.3828 to rise to 1.3906 on higher Asian equities and better than expected HSBC flash China PMI which helped boost sentiment. The focus turns to the EU meeting on Wednesday for the complete crisis plan which will be formed October 26.

 

GBPUSD was initially flat as investors were cautious while EU talks progressed slowly. Cable opened in Asia at 1.5932 and soon soared to a fresh six-week high of 1.5983 on improved sentiment as Asian stock markets rallied on good China PMI data which rose to 51.1 from 49.9 previously.

 

USDCHF gapped up to open Asia at 0.8846 compared to Friday’s US close of 0.8820. The pair then remained little changed and traded a tight 0.8821-57 range. EURCHF opened at 1.2246 and also traded a relatively tight range but rose towards the end of the session to 01.2296 on improved sentiment.

 

USDJPY opened in Asia at 76.17 and jumped to 76.47 after Bank of Japan governor Azumi told reporters in Tokyo today that he is watching markets closely as there have been speculative moves, so investors fear another intervention if yen got too strong.

 

AUDUSD was flat in early Asian trading until it shot up after better than expected flash China PMI that indicated manufacturing in the world’s second largest economy and Australia’s top trade partner showed a rebound in new orders and output and is on track for expansion. AUDUSD opened in Asia at 1.0334 and hit a six-week high of 1.0416.