Asian Session – Yen extends gains after soft China services PMI data
January 6, 2014 8:04 am
The yen extended gains against the dollar and the euro, while the Nikkei fell over 2% as Tokyo markets began their first trading day in 2014 after an extended holiday.
Market sentiment was damp today after data released from China showed that service sector activity slowed to the weakest level in 2 years, fuelling concerns over the growth prospects in the world’s second largest economy. The HSBC/Market PMI for China’s service sectors fell in December to 50.9, the weakest since August 2011, from a prior 52.5.
The data comes after Friday’s disappointing Chinese manufacturing PMI data.
Risk sentiment was generally off, resulting in demand for safe havens like the yen. As a result, the dollar fell 0.46% to 104.34 yen after slipping from an early session high of 104.94.
A relatively hawkish Ben Bernanke on Friday had lifted the dollar across the board after he gave a mostly upbeat US economic outlook for 2014 although he did note that “the overall recovery clearly remains incomplete in the United States.”
The dollar will be closely watched this week as some key risk events are scheduled. On Wednesday, the minutes of the Federal Reserve’s December policy meeting will be released.
On Friday, the all-important US nonfarm payrolls report is expected. The data are extremely important in determining whether the US labour market has recovered enough for the Fed to continue tapering its asset buying.
In its December policy meeting, the Fed announced it will begin tapering its $85 billion-a-month stimulus program in January.
In other currencies, the euro slid 0.49% against the broadly stronger yen in today’s Asian session to 141.76. The euro was steadier against the dollar, down just 0.04% to 1.3585. Later today, European services PMI data will be in focus.
The Australian dollar traded a 40-pip range against its US counterpart, as it was weighed down by the soft China data. China is Australia’s major trading partner.
The yen extended gains against the dollar and the euro, while the Nikkei fell over 2% as Tokyo markets began their first trading day in 2014 after an extended holiday.
Market sentiment was damp today after data released from China showed that service sector activity slowed to the weakest level in 2 years, fuelling concerns over the growth prospects in the world’s second largest economy. The HSBC/Market PMI for China’s service sectors fell in December to 50.9, the weakest since August 2011, from a prior 52.5.
The data comes after Friday’s disappointing Chinese manufacturing PMI data.
Risk sentiment was generally off, resulting in demand for safe havens like the yen. As a result, the dollar fell 0.46% to 104.34 yen after slipping from an early session high of 104.94.
A relatively hawkish Ben Bernanke on Friday had lifted the dollar across the board after he gave a mostly upbeat US economic outlook for 2014 although he did note that “the overall recovery clearly remains incomplete in the United States.”
The dollar will be closely watched this week as some key risk events are scheduled. On Wednesday, the minutes of the Federal Reserve’s December policy meeting will be released.
On Friday, the all-important US nonfarm payrolls report is expected. The data are extremely important in determining whether the US labour market has recovered enough for the Fed to continue tapering its asset buying.
In its December policy meeting, the Fed announced it will begin tapering its $85 billion-a-month stimulus program in January.
In other currencies, the euro slid 0.49% against the broadly stronger yen in today’s Asian session to 141.76. The euro was steadier against the dollar, down just 0.04% to 1.3585. Later today, European services PMI data will be in focus.
The Australian dollar traded a 40-pip range against its US counterpart, as it was weighed down by the soft China data. China is Australia’s major trading partner.
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