- Tankan report shows Japanese business sentiment continuing to improve
- Chinese PMI 55.1 indicating continued expansion of Chinese manufacturing industry
- HSBC China PMI 57
- Australian February balance of good and services worse than expected at -AUD1.9 billion
- IMF comments that NZD is between 10% and 25% overvalued sent the Kiwi lower in early trade
- Asian stockmarkets gain around 1% on average
- Gold steady at $1114/oz
The first move of the day was brought about by the IMF comments regarding the NZD, which promptly fell 50 pips against the USD and this in turn sent the AUD lower also. The AUD/USD fell to .9152, recovered on the back of AUD/JPY buying but overall has had a very quiet session. The poor trade data did not affect the AUD suggesting that the market still has an appetite ahead of the expected rate rise next Tuesday. Range: .9152/85.
USD/JPY and the JPY crosses rallied strongly pre-Tankan but USD/JPY’s inability to break above the overnight high at 93.64 unsettled some long USD players. This along with the strong business sentiment encouraged some broad based profit taking on all the JPY crosses. Ranges: USD/JPY 93.29/64; EUR/JPY 126.02/62.
EUR/USD rallied early on the back of the EUR/JPY buying and after breaching the overnight 1.3550 high, it immediately ran out of steam and fell back towards the NY close. Range: 1.3497/1.3561
Cable mirrored the EUR/USD for the most part in a 1.5174/1.5239 range.
Markets: Nikkei +0.8%, HK +0.9%, Kospi +1.1%. Gold $1114/oz.
