Asian Session – Dollar rises close to 5-year high versus yen
January 2, 2014 8:24 am
The first trading day of the New Year began relatively quietly with some mixed reaction to some disappointing manufacturing data from China yesterday. The official headline PMI fell more-than-forecast in December to 51.0 from 51.4, month-over-month, versus an expected 51.2. Meanwhile a private PMI report from HSBC gave a figure in line with expectations at 50.5, easing from a prior 50.8.
The Tokyo Nikkei was closed today and will be closed until Monday. The US dollar remained resilient and kept its strength from December 31 when it rose on the back of stronger-than-forecast US consumer confidence data from the Conference Board.
The dollar approached close to a 5-year high of 105.40 yen hit on Monday, gaining 0.09% in today’s Asian session to end at 105.32. The dollar ended 2013 with the biggest annual percentage gain against the yen since 1979.
Strength in the dollar against the yen is expected to continue as a result of the growing divergence between the monetary policies of the Federal Reserve and The Bank of Japan. The Fed’s decision to begin tapering this month is helping boost the dollar, while aggressive policy easing by Japan is weakening their currency.
The euro traded lower today ending down at 1.3750 from Tuesday’s 1.3776, though ending the session flat. Manufacturing PMI data from the Euro zone later in the European session will be in focus.
The British pound had a strong opening to 2014 and extended higher against the dollar to a new 2-1/2-year high of 1.6592, up 0.17%. The pound hit a 5-year high of 174.74 against the yen.
Sterling has been gaining steadily since the final weeks of December as a series of strong UK data are raising the possibility that the Bank of England will raise interest rates sooner.
The Australian dollar ended the Asian session at 0.8915, slightly lower from Tuesday after the soft Chinese data. China is Australia’s main export destination.
Upcoming Euro zone PMI’s will be closely watched while during the US session, weekly jobless claims and the Institute for Supply Management’s index of US factory activity will be a key driver for the dollar.
The first trading day of the New Year began relatively quietly with some mixed reaction to some disappointing manufacturing data from China yesterday. The official headline PMI fell more-than-forecast in December to 51.0 from 51.4, month-over-month, versus an expected 51.2. Meanwhile a private PMI report from HSBC gave a figure in line with expectations at 50.5, easing from a prior 50.8.
The Tokyo Nikkei was closed today and will be closed until Monday.
The US dollar remained resilient and kept its strength from December 31 when it rose on the back of stronger-than-forecast US consumer confidence data from the Conference Board.
The dollar approached close to a 5-year high of 105.40 yen hit on Monday, gaining 0.09% in today’s Asian session to end at 105.32. The dollar ended 2013 with the biggest annual percentage gain against the yen since 1979.
Strength in the dollar against the yen is expected to continue as a result of the growing divergence between the monetary policies of the Federal Reserve and The Bank of Japan. The Fed’s decision to begin tapering this month is helping boost the dollar, while aggressive policy easing by Japan is weakening their currency.
The euro traded lower today ending down at 1.3750 from Tuesday’s 1.3776, though ending the session flat. Manufacturing PMI data from the Euro zone later in the European session will be in focus.
The British pound had a strong opening to 2014 and extended higher against the dollar to a new 2-1/2-year high of 1.6592, up 0.17%. The pound hit a 5-year high of 174.74 against the yen.
Sterling has been gaining steadily since the final weeks of December as a series of strong UK data are raising the possibility that the Bank of England will raise interest rates sooner.
The Australian dollar ended the Asian session at 0.8915, slightly lower from Tuesday after the soft Chinese data. China is Australia’s main export destination.
Upcoming Euro zone PMI’s will be closely watched while during the US session, weekly jobless claims and the Institute for Supply Management’s index of US factory activity will be a key driver for the dollar.
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