The USD was mixed in the Asian session Thursday, after risk FX reversed early losses in the wake of data showing an improvement in Chinese manufacturing activity in January. Dealers noted early “risk-off” trading saw currencies like the euro and aussie sliding to session lows, in part due to a drop in shares of U.S-listed Apple Inc. in after-hours trade. Aussie-dollar slipped to a low of $1.0520 and then extended that to $1.0508 while euro-dollar sank to $1.3297 soon after the market opened, but losses were contained amid a lack of any fresh data releases. The release of HSBC’s flash China manufacturing PMI then triggered a broad rebound in risk appetite, and regional stock markets also turned higher. Faster output growth and rising new export orders at the start of the year helped push the flash reading of the HSBC China Purchasing Managers Index to a two-year high. HSBC said its flash China Manufacturing PMI rose to 51.9, outpacing December’s final 51.5 reading, while its flash China manufacturing output index hit a 22-month high of 52.2, exceeding December’s 51.9. Aussie-dollar recovered to $1.0515 after that and was last holding near there, compared with a $1.0552 early open, while euro-dollar also came back up to $1.3317, just about where it had started the day, at $1.3318. Commenting on euro-dollar, tech analysts said, “Expect further sideway trading between a narrower $1.3245/50 and $1.3355/60 range but any clear break of these levels will likely set the direction for the next several days.” “While momentum indicators are neutral, the current movement appears to be consolidating for a break higher. However, this is likely only upon a clear move above $1.3355-60.” In other pairs, dollar-yen was initially weighed down by euro-yen’s early drop, and the pair traded a Y88.41 low as the cross marked Y117.58. Euro-yen’s subsequent recovery toward Y119.00 inspired dollar-yen’s rebound, and the pair was last at Y89.33 compared with a Y89.47 opening level.
EasyForexNews Research Team