Home Forex Market News Asian Session – Dollar / yen eyes 8-month high while Chinese services...

Asian Session – Dollar / yen eyes 8-month high while Chinese services boost risk sentiment

There was some profit-taking regarding the dollar late in the Asian session, after the greenback made some significant gains particularly against the yen and the pound.  The dollar was helped by the previous day’s ISM manufacturing activity survey, which came in at the highest level of the past 3 years.

This showed that the US economy is doing well, in contrast to other developed economies such as the Eurozone and Japan.  Japan’s services sector disappointed, as the Markit PMI services index dipped into contraction territory during August.  Later today, the final services PMIs out of the Eurozone are expected, as is the services’ PMI out of the UK.

Dollar / yen traded as high as 105.30, within striking distance of the 105.44 six-year high registered back in January.  However, it was a step too far too soon for dollar bulls, as profit-taking drove the pair back below the 105 mark at 104.90, in volatile trading.

Risk sentiment was boosted after Chinese services PMIs, both from the official statistics bureau and from private sources, showed the services sector expanding in a healthy way.  This helped Asian stocks to gain and US index futures to climb into positive territory.

The euro was again resilient in the face of the dollar’s advance, as euro / dollar climbed back to 1.3137.  The pound was under pressure – particularly against the dollar as it made a 7-month low at 1.6443.  The pound was hit by worries that the Scottish independence referendum in 2 weeks could be too close to call, ushering in a period of economic and political uncertainty for the UK.

Other statistics scheduled for today include July Eurozone retail sales and factory orders and the Fed’s Beige Book out of the United States.

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