ASIA session review: Euro rises on PMI data

Data released: 

01:45 GMT China HSBC Manufacturing PMI (Jan) Preliminar 49.6 50.6 50.5 

08:28 GMT Germany Markit Manufacturing PMI (Jan) Preliminar 56.3 54.6 54.3 

08:28 GMT Germany Markit Services PMI (Jan) Preliminar 53.6 54.0 53.5 

08:58 GMT EMU Markit Manufacturing PMI (Jan) Preliminar 53.9 53.0 52.7 

08:58 GMT EMU Markit PMI Composite (Jan) Preliminar 53.2 52.4 52.1

08:58 GMT EMU Markit Services PMI (Jan) Preliminar 51.9 51.4 51.0 

09:00 GMT EMU Current Account s.a (Nov) €23.5B €19.2B €22.2B 

09:00 GMT EMU Current Account n.s.a (Nov) €27.4B _ €26.6B 

The euro rose the most against the dollar in three months after a report showed French manufacturing increased more this month than analysts forecast, boosting optimism that growth in the region is strengthening.

European Central Bank President Mario Draghi said there are encouraging signs of an economic recovery in the euro zone, though the upswing is still weak and the danger of a setback remains large.

A preliminary reading of HSBC’s January China manufacturing Purchase Manufacturing Index fell to 49.6, down from 50.5 in the final result for December. It was the first contraction for the sector in six months.

EURO

Markit Economics said today its gauge of manufacturing output for France rose to 48.8 in January from 47 in the previous month. The median estimate of economists was for an increase to 47.5. EMU’s manufacturing and services PMI also surpassed expectations during January, advancing to 53.9 and 53.2, respectively. In the same direction, Current Account surplus in the 18-country region widened to €23.5 billion during November, up from €22.2 billion. 

EUR/USD rallied to $1.3590 with initial resistance now comes at $1.3600 and $1.3685/95. Above - at $1.3720 and $1.3820 (Dec 30 highs). Below $1.3500 losses may widen to $1.3400 (Nov 21 lows).

POUND

The pound remains higher amid general dollar’s weakness. 

GBP/USD rallied to $1.6610, breaking above the resistances at $1.6520 and $1.6580 (Dec 27 highs). Now resistance comes at $1.6675/80 (channel line from Jan 10). Minor support comes at $1.6580, $1.6520 and $1.6400.

YEN

The yen failed to break above the key Y105 resistance overnight and retreated.

USD/JPY consolidates between Y104.00/50. Minor resistance is around Y104.90/00 (Jan 16 highs). Initial support comes at Y103.85 (recent lows). Below losses may extend to Y103.00 and Y102.20 (Dec 11 lows).

DATA AHEAD:

At 11:00 GMT UK Jan CBI Distributive Trades Survey is due to come.

At 13:30 GMT Canada releases Nov Retail Sales, while US data at this time include Initial Jobless Claims.

At 15:00 GMT Dec Existing Home Sales Change is due to come.

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