The Great Britain pound rallied today even as data showed that manufacturing shrank last month. The good part of the report was that the sector’s decline was smaller than anticipated by analysts.
The Markit/CIPS UK Manufacturing Purchasing Managers’ Index rose from 48.6 in March to 49.8 in April, while specialists have expected it to stay unchanged. The data was not good, strictly speaking, as the reading below 50.0 indicated contraction of the industry, but at least it was better than market participants have hoped for. Of course, traders were favoring the sterling recently, making it rally even amid poor fundamentals.
GBP/USD rose from 1.5530 to 1.5568, trading near the strongest rate since February 13, and GBP/JPY rallied from 151.30 to 151.97 as of 10:09 GMT today.
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The New Zealand dollar gained today on hopes that the Federal Reserve will confirm that quantitative easing stays in place. The currency maintained gains even as China’s manufacturing growth slowed.
China’s manufacturing Purchasing Managers’ Index fell from 50.9 in March to 50.6 in April, while analysts have predicted it to remain near the previous level. The index still points on expansion, unlike in some developed nations, making the data not that bad. The New Zealand currency remains firm as traders await for the Fed’s decision today. No changes to the monetary policy are expected, making it likely that demand for riskier assets will persist.
NZD/USD rose from 0.8558 to 0.8577 and NZD/JPY ticked up from 83.36 to 83.63 as of 10:52 GMT today.
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The euro dropped today as the manufacturing and service sectors continued to contract in the eurozone, fueling speculations that the European Central Bank will ease its monetary policy.
Both eurozone manufacturing and service Purchasing Managers’ Indices were below the 50.0 level in April, indicating a contraction. Germany contributed to the decline as its PMIs were also in the contraction zone. Reports from outside of Europe were not good either, leading to talks that the ECB will have no other choice but to ease its policy further.
EUR/USD declined from 1.3065 to 1.2998 and EUR/JPY dropped from 129.64 to 128.25 as of 11:13 GMT today.
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The New Zealand dollar dropped today as slowing growth of China’s manufacturing sector led to worries about global economic growth and hurt prospects for New Zealand exports.
The HSBC Flash China Manufacturing Purchasing Managers’ Index dropped from 51.6 in March to 50.5 in April. The median forecast promised smaller decrease to 51.4. China is the biggest trading partner of New Zealand.
The recent data from China fueled concerns that nation’s economic growth is slowing. Of course, the economy still looks very powerful, especially compared to the stagnating economies of developed nations, but weaker growth made investors nervous.
NZD/USD fell from 0.8422 to 0.8390 and NZD/JPY slid from 83.57 to 82.89 as of 4:50 GMT today.
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The Great Britain pound slumped today after the report showed that the manufacturing sector remained in contraction, albeit shrinking with slower pace.
The Markit/CIPS UK Manufacturing PMI rose from 47.9 in February to 48.3 in March. Still, the reading below 50.0 indicates decline of the industry. Moreover, the actual figure was below the forecast of 48.9. The data reminded traders that Britain remains deep in troubles, driving investors away from the nation’s currency.
GBP/USD dropped from 1.5228 to 1.5114 and GBP/JPY sank from 141.95 to 141.31 as of 16:57 GMT today.
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The New Zealand dollar rose as the expanding manufacturing sectors and improving consumer confidence lead to speculations that the nation’s central bank will keep interest rates stable.
The BNZ-BusinessNZ seasonally adjusted PMI rose 4.8 points from December to 55.2 in January. It was the highest reading since May. The ANZ-Roy Morgan Consumer Confidence measure climbed 2.7 points to 121 in February, reaching the 32-month high.
The New Zealand economy was showing signs of strength previously, so the positive data was not completely unexpected. Yet the how good it actually was surprised market participants to some degree.
NZD/USD climbed from 0.8451 to 0.8466 as of 6:16 GMT today, touching 0.8490 intraday — the strongest price since September 2011. NZD/JPY went up from 78.93 to 79.19.
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Australian manufacturing contracted in January, indicating that the nation’s economy remains weak and putting pressure on the Australian dollar. Yet the currency remained little changed today, trading at the highest level since 2008 against the Japanese yen.
The manufacturing index of Australian Industry Group was at 40.2 in January, falling from 44.3 in the prior month. A reading below 50.0 means decline of the sector. The indices for services and construction also showed contraction.
Domestic fundamentals were tough for the Aussie, yet the currency paid no heed for them. Perhaps, hopes for stimulus from the Federal Reserve buoyed AUD. Additionally, tomorrow’s US non-farm payrolls are expected to demonstrate robust growth, adding to the positive sentiment of traders.
AUD/USD rose a little from 1.0415 to 1.0430 as of 23:53 GMT today, bouncing from the daily low of 1.0378. EUR/AUD picked up from 1.3021 to 1.3043. AUD/JPY jumped from 94.83 to 95.67, the highest since August 2008.
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The Australian dollar erased its earlier losses versus the Japanese yen and rose against the US dollar (though it slipped back later) as the data showed an expansion of China’s manufacturing sector.
Markit/HSBC China’s manufacturing Purchasing Managers’ Index rose from 50.5 in November to 51.5 in December, the highest level since May 2011. A reading above 50.0 indicates expansion. Previously, the private index was contradicting the government data as one was showing contraction, while another was insisting on improvement. Now both show that China’s manufacturing expands.
AUD/USD traded near its opening of 1.0366 as of 12:02 GMT today, following the earlier rally to 1.0407. AUD/JPY was at 89.30 after falling from 89.20 to 88.75.
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The Chinese yuan weakened today even after the data showed an expansion of the manufacturing sector this month. Other Asian currencies also slipped, erasing previous gains.
China’s manufacturing Purchasing Managers’ Index rose from 50.5 in November to 50.9 in December, according to the flash estimate. That was the highest level in fourteen months. Yet the yuan fell, spurring talks that the government intervened to weaken the currency.
USD/CNY rose from 6.2465 to 6.2527 as of 11:50 GMT today, erasing the previous drop to 6.2336.
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The New Zealand dollar appreciated today, reaching the strongest level since March against its US peer, as the increase of New Zealand manufacturing sales overshadowed negative factors. The currency advanced versus the Japanese yen, but later erased gains.
New Zealand’s manufacturing sales grew 1.6 percent in the third quarter of 2012 from the second quarter. The increased followed the drop by 0.8 percent in the preceding quarter (revised positively from 1.1 percent decline). The positive domestic fundamentals allowed the New Zealand currency to shrug off the negative news from China.
NZD/USD rose from 0.8322 to 0.8346 as of 14:29 GMT today, reaching the highest settlement since March 2. NZD/JPY drop from 68.67 to 68.60 after reaching the daily high of 68.85.
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