Both the Euro and the Japanese Yen edged higher in London trade after the release of a number of Chinese manufacturing surveys suggested further cooling of the world’s second biggest economy. Chinese PMI releases for the month of August were generally disappointing; the majority of the reports fell short of analysts’ expectations. Concerns over China are driving market sentiment, especially as regards risk, with the safe haven currencies the beneficiary of traders’ concerns.
As reported at 11:24 am (BDT) in London, the USD/JPY pair was trading lower at 120.1095 Yen, a loss of 0.93%; the pair ranged from 119.5505 Yen at the low end to 121.2450 Yen at the high end. The EUR/USD was 0.53% higher at $1.1269; the pair hit a high of $1.1335, well off last week’s 1-week trough set at $1.1156.
Friday NFP in Focus
Markets are still unsure how the Federal Reserve might react to the global economic stresses. Recently, some Fed members suggested that a rate increase might still be a viable option. However, analysts say that that is likely to depend, to a great extent, on incoming US data which could tip the balance. Primarily, Friday’s release of private sector labor data could provide a lift to the US Dollar if the consensus estimates of 230,000 new jobs are met. Any negative deviation would pressure the greenback and could set back expectations again.