By: Barbara Zigah
In Asian trade, commodity-linked currencies fell on news that China’s non-manufacturing PMI slipped to 52.9 last month from December’s reading of 56.0. On the news the Euro and the Aussie Dollar moved lower; as reported at 12:29 p.m. (JST) in Tokyo, the Euro traded at $1.3114, striking an intraday low, while the Australian Dollar slipped against the U.S. Dollar to $1.0675, a decline of 0.2%. The HSBC Services PMI also showed that new orders for January rose at a steady pace which helped to stem the slide. Both currencies have since recouped and the EUR/USD is now trading at $1.3138 while AUD/USD is trading at $1.0685.
Analysts say that the mixed data out of China doesn’t offer too many reasons for optimism and traders will be hard-pressed to move the heavy guns into the commodity-linked currencies. Also weighing heavily will be the later announcement of the U.S. non-farms payroll data. Analysts expect an increase of 150,000 new jobs, well off the previous month’s pace, and that the unemployment rate will remain unchanged. Fed Chairman Ben Bernanke yesterday testified in the U.S. Congress and acknowledged that the Eurozone’s difficulties were weighing heavily on the U.S. recovery. He said it was the bank’s responsibility to do all within its power to ward off potential damage.