Forex: Monday’s review

Yesterday the yen rose against all of its 16 most-traded counterparts amid investor concern that Chinese manufacturing was weaker as official government data conflicted with a private-sector purchasing-manager index. The Chinese purchasing manager’s index released by the country’s logistics federation and National Bureau of Statistics for March rose to a one-year high of 53.1. In contrast, a PMI from HSBC Holdings Plc and Markit Economics showed manufacturing contracting and export orders declining. The index fell to 48.3 in March from 49.6 the previous month. The Tankan index for Japan’s largest manufacturers was unchanged last quarter from minus 4 in December, the BOJ said today in Tokyo. A negative number means pessimists outnumber optimists.

Currencies of commodity-producing nations rallied against the dollar after a report showed manufacturing in the U.S. increased last month. Australia’s dollar had its biggest intraday gain versus the greenback in two months. The figures compare with a gain in the Institute for Supply Management’s U.S. factory index to 53.4 from 52.4 in February. Economists forecast an increase to 53. Fifty is the dividing line between growth and contraction.

The euro may weaken to match the lowest level since September 2010 against the pound after failing to rise above 84 pence, Karen Jones, a technical strategist in London, wrote in an e-mailed note. Europe’s shared currency slipped against the dollar after euro-region unemployment rose to the highest level in more than 14 years and manufacturing contracted.

EUR/USD: yesterday the pair fell below $1.3300, however restored later.

GBP/USD: yesterday the pair raised, updated a monthly high.

USD/JPY: yesterday the pair fell to Y82.00.

On Tuesday core-European data includes German car registrations data, although scheduled releases sees EMU Q4 GDP and February PPI data. UK data starts at 0830GMT Tuesday with the release of the Markit/CIPS Construction PMI for March. US data includes February auto sales results through the day, where domestic-made light vehicle sales are expected to rise to an 11.5 million annual rate after warmer-than-usual weather resulted in solid readings in the previous two months. At 1345GMT, the ISM-NY Business Index is due, while at 1400GMT, factory new orders are expected to rise 1.5% in February. Durables orders were  already reported up 2.2% on rebounds in a number of components after sharp January declines. Focus shifts to the Fed later in the session with the 1800GMT release of the latest FOMC minutes.