Euro and yen rise on risk aversion
The euro and Japanese yen rose against the greenback as investors’ risk sentiment deteriorated after China release data showing official manufacturing PMI sliding from 50.0 to 49.7. Shanghai Composite lost more than 1%. Traders bought low-yielding EUR and JPY as safe havens. EUR/USD rose to 1.1330 from Monday’s low at 1.1155. USD/JPY returned to 120.00 after failing to overcome resistance at 121.70.
On Tuesday traders await US ISM Manufacturing PMI (14:00 GMT). Traders will be closely watching this and other US data releases ahead of Federal Reserve’s September meeting. Last week Fed Vice Chairman Stanley Fischer did not rule out the possibility of a rate hike in September.
The Reserve Bank of Australia, as expected, left its benchmark rate unchanged at 2%. AUD/USD rose to 0.7150, but then returned down to 0.7100 on concerns about China.