Market News

The U.S. Dollar firmed in Asian trading despite five weeks of oversold territory for the greenback which resulted in a near continuous decline for the U.S. currency. U.S. economic data has not improved steadily enough to warrant further speculation that the Federal Reserve might soon be tapering its quantitative easing program, though neither has it been deficient enough to speculate on the opposite.

In Asian trading the U.S. Dollar is poised to record a straight week’s worth of declines while the Index held near to a 7-week trough following the recent release of unexpectedly strong economic data from China which gave investors a reason to seek out higher yielding currencies.

Economic data releases from the Pacific Rim, which included July labor data from Australia as well as trade data from China, had already been putting some pressure on the Aussie Dollar ahead of the news releases.

The U.S. Dollar edged lower against the Japanese Yen during thin trading in Asia and market players are anxious to see whether the Nikkei’s recent decline will continue and help to give the Japanese currency another boost.

The Pound Sterling continued to hold in positive territory following the release of a survey which suggested that the U.K’s economy is finally on the road to recovery.

The New Zealand Dollar lost almost 200 pips against its U.S. counterpart during the early Asian session after investors learned that the potentially fatal botulism bacteria was found in some products exported by the country’s largest dairy producer, Fonterra.

Just ahead of the release of key employment data from the U.S. Bureau of Labor Statistics, the U.S. Dollar managed to hold onto earlier gains after getting a much-needed boost from unexpectedly upbeat data which would support the Fed’s curtailing of its quantitative easing measures.

The Federal Reserve Bank released its monthly policy decision and held interest rates at the current level, however the Fed's failure to address the issue of the timetable for tapering for quantitative easing scheme left Dollar bulls in the lurch and sent the U.S. Dollar Index wallowing close to a 6-week trough.

In lackluster trading, the U.S. Dollar Index continues to struggle broadly despite slight gains made early in the Asian session.

U.S. Dollar traders continue to be in a holding pattern as they await a monetary policy decision from the Federal Reserve later this week, as well as the critical non-farms payroll data which will be released on Friday.

With a week ahead chock full of economic data points which includes monetary policy decisions from both the European Central Bank, Bank of England and the Federal Reserve as well as U.S. non-farms payroll data and Chinese manufacturing figures, the U.S. Dollar was caught flatfooted during early Asian trade, with negative momentum continuing from last week.

Tokyo shares fell sharply on Friday on the back of a stronger yen.

The euro zone saw increased economic activity in July according to the euro zone flash composite PMI readings on Wednesday.

As a signal that China’s slowdown has not reached its low, the nation’s manufacturing numbers continued to drop in July.

With Asian economies continuing to grow and with the U.S. Federal Reserve reducing its stimulus measures, China’s Premier Li Keqiang said yesterday that the “bottom line” for China’s gross domestic product this year is 7 percent and that the nation can’t let growth go below that.