ASIA session review: Dollar holds stable ahead of US data

Data released:

01:45 GMT China HSBC Manufacturing PMI (Apr) Preliminar 48.3 48.4 48.0 

07:30 GMT Germany Markit Manufacturing PMI (Apr) Preliminar 54.2 54.0 53.7 

07:30 GMT Germany Markit Services PMI (Apr) Preliminar 55.0 53.4 53.0 

08:00 GMT EMU Markit Manufacturing PMI (Apr) Preliminar 53.3 53.0 53.0 

08:00 GMT EMU Markit PMI Composite (Apr) Preliminar 54.0 53.1 53.1 

08:00 GMT EMU Markit Services PMI (Apr) Preliminar 53.1 52.4 52.2 

08:30 GMT UK Bank of England Minutes Vote Unchanged 9 9 9 

08:30 GMT UK Public Sector Net Borrowing (Mar) £4.861B £9.100B £7.001B

The Dollar Index rose to the highest in two weeks before U.S. reports today on new home sales and manufacturing.

U.S. new home sales increased 2.3% to a 450,000 annualized pace in March from the previous month, when they declined 3.3%, according to a survey before the Commerce Department report today. 

EURO

There was only one chance for the euro to recover – German data. The Manufacturing PMI came out at 54.2 vs 53.9 forecasted, thus triggering some recovery for the pair. 

Preliminary Eurozone PMI Manufacturing improved to 53.3 points in April, from 53 points in March, according to data released. PMI Services climbed to 53.1 points in April, from 52.2 the previous month and above expectations of an increase to 52.4. PMI Composite edged up to 54 from 53.1, against forecasts of staying unchanged.

EUR/USD rallied from session low at $1.3800 to $1.3840. Initial resistance comes at $1.3850 (Monday’s high), then - at $1.3900 with a break above targets $1.3965 (Mar 13 high). Below $1.3800 minor support comes at $1.3740 (Apr 8 lows), extending to $1.3670 (Apr 4 lows).

POUND

According to thr MPC minutes released, the BOE MPC voted 9-0 to keep rates and QE on hold. The MPC sees economy growing around 1% Q1 and Q2, sees risks from widening of UK current account, sees risks in low euro area inflation. The memebers note the UK recovery building momentum. 

GBP/USD fell to $1.6800 from Asia highs on $1.6840 (initial resistance). Further resistance comes at $1.6880 (Nov 15’2009 high). Support is near $1.6780, below - at $1.6700 and around Tuesday’s lows on $1.6660 with a break under widens losses to $1.6620 (trend support line from Nov 12’2013).

YEN

The yen remains within the range.

USD/JPY holds within the Y102.40-Y102.70 range (initial support/resistance respectively). Further resistance comes at Y103.40 and around Y104.00. Stronger one remains at Y104.30/80. Support comes at Y101.30 (Apr 10 lows). Below support comes at Y100.70 (Feb 7 lows).

COMMODITY CURRENCIES:

AUSSIE: The Aussie fell on Wednesday. The nation’s core consumer prices gained less than economists forecast last quarter, allowing the central bank to extend a period of steady interest rates. The trimmed mean gauge of core prices rose 0.5% from the previous quarter compared with the median forecast of economists for a 0.7% gain.

The preliminary Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics was 48.3 in April, matching the median estimate of analysts. While that was higher than the final March figure of 48, the reading remains below the level of 50.

DATA AHEAD

At 14:00 GMT USA bring Mar New Home Sales for March.

Later, at 20:00 GMT, RBNZ announces its Interest Rate Decision with 3.00% expected after 2.75%.

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