Asian Session Forex Recap – Sept. 1, 2015

  • Chinese official manufacturing PMI down from 50.0 to 49.7 in Aug
  • Chinese official services PMI down from 53.9 to 53.4 in Aug
  • China’s Aug Caixin final manu PMI revised from 47.1 to 47.3
  • China’s Aug Caixin final services PMI downgraded from 53.8 to 51.5
  • Australian building approvals up by 4.2% vs. projected 2.9% gain
  • Australian current account deficit widened from 13.5B to 19B AUD
  • RBA kept interest rates on hold as expected
  • RBA: Aussie is adjusting to falling commodity prices
  • Japanese capital spending up by 5.6% in Q2 vs 9.0% forecast

More signs of a slowdown in China? The latest set of PMI readings from Markit and the Chinese government reflected weaknesses in both the manufacturing and services sectors. The official manufacturing PMI showed a drop from 50.0 to 49.7 in August while the services PMI indicated a decline from 53.9 to 53.4. Meanwhile, the Caixin final manufacturing PMI enjoyed a small upgrade from 47.1 to 47.3 but the final services PMI suffered a sharp downgrade from 53.8 to 51.5.

Data from Australia came in mixed, as building approvals surged by 4.2% versus the projected 2.9% gain while the current account deficit widened to 19 billion AUD from a downgraded 13.5 billion AUD shortfall. Nonetheless, the RBA decided to keep interest rates on hold at 2.00% as expected while confirming that the Australian dollar is already adjusting to falling commodity prices. Nothing new here!

AUD/USD popped up to a high of .7153 and is up 20 pips (+0.18%) while AUD/JPY barely reacted to the reports and is hovering around the 86.00 handle (-0.18%). The Aussie is looking weaker compared to its European forex rivals, with EUR/AUD up by 50 pips (+0.32%) and GBP/AUD up by 30 pips (+0.13%).

Up ahead, forex junkies could turn their attention to the pound pairs since the U.K. is set to release its manufacturing PMI and net lending to individuals data at 9:30 am GMT. The manufacturing index is slated to hold steady at 51.9 for August while net lending to individuals could tick up from 3.8 billion GBP to 3.9 billion GBP.

In the euro zone, the final manufacturing readings are due from Germany and France. No major revisions are expected so traders might focus more on the jobs reports from Germany and Italy, with the former likely to show a 3K drop in unemployment. Switzerland is also set to print its manufacturing PMI for August and might show a climb from 48.7 to 49.9.

See also:

U.S. Session Recap

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