Forex Market Update: Australian Dollar Sags against US Dollar, Yen Tumbles as Well
Australian dollar slumped against the U.S. dollar after an official PMI data from China disappointed market participants. Although the Purchasing Managers’ Index (PMI) showed that production output ran at a fastest pace in March in last 11 months, it missed economists’ estimation. The reading came at 50.9 while economists were expecting 52. Australia is one of the top exporters to China (metals and commodities), and therefore Aussie dollar tends to be under pressure when China’s economy shows signs of economic slowdown.
During Asian trading hours, the Aussie dollar edged down as low as 0.3 percent to $1.0393, moving near to support at its 200-day moving average, which is at $1.0383. At last check it recovered much of its lost territory and was last down 0.03% against the greenback.
The Australian dollar also tumbled 0.6 percent to 97.55 yen during Asian trading hours.
Meanwhile, the yen also fell sharply against the U.S. dollar after Bank of Japan’s tankan survey showed that top manufacturers in Japan remained gloomier-than-anticipated in the period stretching from January to March. At last check yen slumped 0.66% to trade at 93.67 yen. The yen is likely to face pressure in coming days as the Bank of Japan (BOJ) is expected to announce more monetary easing measures (open ended bond purchase program) to provide much needed impetus to an economy reeling under deflation.
Earlier during the day, yen climbed 0.4% against the dollar as there was unusual buying pressure. “It looks like someone bought up yen, on a scale that wouldn’t usually affect the market, but it caused a spike due to today’s low liquidity,” said Michiyoshi Kato, senior vice president of forex sales at Mizuho Corporate Bank, according to Reuters.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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