US Session – USDJPY hits fresh 4-week high after upbeat ISM manufacturing data
July 1, 2013 8:04 pm
Risk sentiment was more evident in the currency markets during the US trading session on Monday, as the start of a new quarter began with stronger data. A report from the Institute for Supply Management (ISM) showed US manufacturing expanded in June, while Japanese and European data pointed to improving economic recovery.
The ISM index improved after three months of declines, rising to 50.9 percent from 49.0 percent in May. A figure above 50 signals expansion, while below indicates contraction.
The dollar rose against the yen, benefiting from the ISM data, propelling USDJPY to fresh four-week highs at 99.85 yen.
Markets are sensitive to US data because it will more or less determine when the Fed will taper its $85 billion a month in asset purchases, which have driven interest rates to record lows has had a weakening effect on the dollar.
Other currencies, particular riskier assets, also benefited from the upbeat data, as the overall data painted a picture of a more stable global economy and provided relief for risky assets.
Euro zone manufacturing purchasing managers’ index (PMI) hit a 16-month high, suggesting an improving sector which had been suffering.
EURUSD peaked at $1.3065 towards the end of the US session while GBPUSD hit a high of $1.5247. Today data showed UK manufacturing grew at its fastest pace in more than two years.
Risk sentiment was more evident in the currency markets during the US trading session on Monday, as the start of a new quarter began with stronger data. A report from the Institute for Supply Management (ISM) showed US manufacturing expanded in June, while Japanese and European data pointed to improving economic recovery.
The ISM index improved after three months of declines, rising to 50.9 percent from 49.0 percent in May. A figure above 50 signals expansion, while below indicates contraction.
The dollar rose against the yen, benefiting from the ISM data, propelling USDJPY to fresh four-week highs at 99.85 yen.
Markets are sensitive to US data because it will more or less determine when the Fed will taper its $85 billion a month in asset purchases, which have driven interest rates to record lows has had a weakening effect on the dollar.
Other currencies, particular riskier assets, also benefited from the upbeat data, as the overall data painted a picture of a more stable global economy and provided relief for risky assets.
Euro zone manufacturing purchasing managers’ index (PMI) hit a 16-month high, suggesting an improving sector which had been suffering.
EURUSD peaked at $1.3065 towards the end of the US session while GBPUSD hit a high of $1.5247. Today data showed UK manufacturing grew at its fastest pace in more than two years.
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