Daily Financial Markets Update: Yen Pairs Resume Slide, Awaiting RBA

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The Greenback gave up more ground to its forex counterparts when the ISM manufacturing PMI came in below expectations. The April reading slipped from 51.8 to 50.8 versus expectations of a dip to 51.6. The employment and prices components indicated gains but inventories, deliveries, and production dragged the overall result down.

USDJPY is down to the 106.00 levels, EURUSD popped up to a high of 1.1543, GBPUSD is up to 1.4684, USDCHF is down to .9539, and USDCAD is testing the 1.2500 support level once more. There are no major reports up for release from the US economy today but FOMC official Mester has a speech scheduled.

Yen pairs resume slide on risk-off flows

Chinese and UK banks were closed for the holiday yesterday, but there was still enough volatility to trigger fresh declines for yen pairs. EURJPY retreated to a high of 122.93, GBPJPY popped up to a high of 156.66 then dropped back to 155.86, NZDJPY rallied to a high of 74.85, and CADJPY consolidated above the 85.00 handle.

Japan’s final manufacturing PMI was upgraded from 48.0 to 48.2 for April, allowing a bit of risk-taking to happen during the earlier sessions. Over the weekend, the Chinese official manufacturing PMI fell from 50.2 to 50.1 while the non-manufacturing index dropped from 53.8 to 53.5. Up ahead, the UK manufacturing PMI is due and a rise from 51.0 to 51.3 is expected, possibly spurring additional volatility for pound pairs.

Aussie pairs steady ahead of RBA decision

The Australian dollar made a few good moves yesterday, as traders lightened up on their holdings ahead of today’s interest rate decision from the Reserve Bank of Australia. Majority of market participants are expecting rates to stay unchanged at 2.00% but the recent negative quarterly CPI reading still keeps the possibility of a cut on the table.

Prior to this, Australia reported a 3.7% jump in building approvals versus the projected 1.8% slump. The Chinese Caixin manufacturing PMI missed expectations and fell from 49.7 to 49.4 instead of improving to 49.8.

Later on in the day, the Kiwi could take center stage with the Global Dairy Trade auction coming up ahead of the release of New Zealand’s quarterly jobs report. A 0.6% increase in hiring is eyed, slower than the previous 0.9% gain, while the jobless rate could climb from 5.3% to 5.5%.

 

To contact the reporter of the story: Samuel Rae at samuel@forexminute.com

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