Currency Analyst since 2010

Dec. 2: Asian session

US dollar holds well against Japanese yen and Canadian dollar, but made a dramatic fall versus British pound. Demand for safety of American currency declined before reports that may signal a global manufacturing pickup.

EUR/USD is trading just above $1.3600. In the euro area watch for Spanish and Italian Manufacturing PMIs due at 08:15 and 08:45 GMT (higher readings are expected) and in the US for ISM Manufacturing PMI due at 15:00 GMT (forecast 55.2 vs. previous 56.4). GBP/USD reached $1.6442. Britain will release manufacturing PMI at 09:30 GMT (forecast: 56.5 vs. previous 56.0).

USD/JPY reversed down from the last week’s 6-month high of 102.60 on the news that the one of the authors of Japan's aggressive stimulus, Economics Minister Akira Amari, was hospitalized. The pair has filled the morning bullish gap and dipped lower to 102.22. BOJ Governor Haruhiko Kuroda said today he wouldn’t hesitate to adjust policy fanning speculation the bank could take more easing steps next year. USD/CHF declined to the 0.9040 area, but is trading above Friday’s low at 0.9028. Swiss SVME PMI will be released at 08:30 GMT (forecast 55.1 vs. 54.2).

Commodity currencies are supported by the upbeat Chinese data. China's official November manufacturing PMI, released over the weekend, held at an 18-month high of 51.4, unchanged from October and the forecast of 51.2. HSBC manufacturing PMI, released early Monday, has also come above the forecast at 50.8 (forecast: 50.5, prior: 50.4). As a result, AUD/USD opened the week with a bullish gap at $0.9130, retraced lower to fill it and then has extended growth on HSBC figures. The pair is currently trading around $0.9160. Don’t forget the RBA holds a monthly policy meeting on Tuesday. NZD/USD has followed the Aussie, touching a session high of $0.8208. USD/CAD opened at 1.0620 and is trading though a bit on the downside, but at highest levels since Oct. 2011.

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