Article Highlights

  • Japanese Tankan manufacturing index up from 12 to 13
  • Japanese Tankan non-manufacturing index down from 19 to 13
  • Nikkei closed 0.58% lower for the day
  • Chinese official manufacturing PMI unchanged at 51.1
  • Australian retail sales up by 0.1%, lower than estimated 0.4% rise
  • U.K. manufacturing PMI to show small uptick?
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Economic data pushed forex pairs around in the Asian trading session, with the Aussie winding up as the biggest loser in the past few hours. Australia’s retail sales report showed a bleak 0.1% uptick for August, lower than the estimated 0.4% increase and the previous 0.4% figure. In China, the official manufacturing PMI held steady at 51.1 as expected.

AUD/USD sank to a low of .8664 before recovering close to .8700 while AUD/JPY dipped to 95.23. Aussie crosses also saw a lot of movement, with EUR/AUD zooming up by more than a hundred pips after the retail sales release and GBP/AUD breaking past the 1.8600 handle.

Over in Japan, the Tankan survey printed mixed results, as the manufacturing component improved from 12 to 13 while the non-manufacturing component dropped from 19 to 13. USD/JPY finally tested the closely watched 110.00 area and hit a high of 110.10 before retreating while GBP/JPY continued to move sideways below the 178.00 handle.

The upcoming U.K. manufacturing PMI release might be enough to push GBP/JPY out of its tight range, as the figure is slated to tick up from 52.5 to 52.6 in September. A higher than expected reading could remind traders of the BOE’s rate hike projections, which could spur demand for the British pound. On the other hand, a lower than expected reading might cast doubts on whether the BOE would be ready to tighten next year.

Also in today’s forex events schedule are the Spanish and Italian manufacturing PMI releases. Both are expected to show small declines, which could add to euro selling pressure. Switzerland is set to print its SVME PMI and possibly see a decline from 52.9 to 52.1, which could lead to franc weakness. Stay on your toes if you’re trading the European currencies today!

U.S. Session Recap

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.

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