- US flash manufacturing PMI down from 57.1 to 55.5
- G7 leaders cancel G8 meeting in Russia
- New Zealand Finance Minister expects NZD to depreciate
- Chinese CB leading index due
The Greenback was off to a weak start in Monday’s trading as it lost ground to most of its major counterparts, except for the pound. Data from the US economy was weaker than expected, with the flash manufacturing PMI tumbling down from 57.1 to 55.5 instead of just dipping to 56.6. EUR/USD bounced back above the 1.3800 major psychological level while GBP/USD moved sideways along the 1.6500 handle.
As Forex Gump predicted in his article about Russia’s sanctions, the political tension continued to heat up as G7 leaders decided to formally cancel the G8 meeting in Sochi, Russia. According to their press statement, “We will suspend our participation in the G-8 until Russia changes course and the environment comes back to where the G-8 is able to have a meaningful discussion.” However, most major pairs seemed unfazed with the announcement, as several market watchers already expected this to happen.
Earlier in today’s Asian trading session, New Zealand Finance Minister English declared that he expects the Kiwi to decline over time. Although he expects the RBNZ’s recent rate hike to keep NZD/USD afloat in the near term, he thinks that tight fiscal policy should prevent strong rallies in the longer run. Despite that, NZD/USD managed to hold on to its recent gains so far and kept its head above the .8500 mark.
In the next few hours, we’ll see China’s CB leading index, which is expected to show a weaker figure compared to the previous 1.2% reading. This might spur talks of stimulus from the Chinese government or the PBoC, which could affect Aussie movement later on.
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