The US Dollar and the Yen Strengthened Its Positions on Monday

March 3, 2014

On Monday March, 3 the US dollar was traded upwards Vs. most major currencies amid ISM Manufacturing PMI growth in the USA. Markit PMI, Personal Income, and Personal Spending data appeared to be better than expected. The yen strengthened its positions due to the demand for save heaven currencies amid heightening of tension in Ukraine.

Personal Income increased in January by 0.3% comparing with the previous month, having exceeded the expectations of growth by 0.2% - whereas personal Spending strengthened its position by 0.4% m/m, which appeared to be more than forecasted +0.1%. Report confirms the last data pointing that Americans start overcoming the results of severe winter. ISM Manufacturing PMI in February increased to 53.2 p. from 51.3 p. in January, having considerably exceeded the expectations of growth to 52 p.

Final Markit Manufacturing PMI also appeared to be better in February, and increased to 57.1 p. comparing with preliminary estimations at the level of 56.7 p. and January reading of 53.7 p. According to Markit, PMI signaled the most significant improvement of doing business terms for over 45 months.

The yen increased to its monthly high Vs. the US dollar due to the demand for save heaven currencies – amid escalation of tension in Ukraine on the weekend, when the President of Russia Putin got obtained admittance from the Parliament to use military forces in this country. Interference of Russia into Ukrainian events sparked concern about the big international conflict. On Monday gold prices increased to its high for over the last 4 months. Light Sweet Crude Oil (WTI) futures increased to the highest rate for more than 5 months.

The euro dropped on Monday from 2-month highs Vs. the dollar amid heightening tension in Ukraine – though ECB’s Draghi announced than economic influence of Ukraine to the Eurozone is limited, and commercial relations are not significant. Final Eurozone Manufacturing PMI decreased in February to 53.2 p., comparing with 54 p. in January, though it appeared to be better than preliminary estimations at the level of 53 p. German and Italian PMI decreased, whereas French and Spanish increased.

The pound sterling also decreased, having almost no reaction to the British data of manufacturing sectors, which appeared to be slightly better than expected. Manufacturing PMI increased in February to 56.9 p. comparing with 56.6 p. in January, whereas reduction was expected. According to Bank of England, Mortgage Approvals increased in January to its high for over more than 6 years – 76 900 against the expectations of growth to 73 500, but lending volume goes on reducing.

 

The Australian dollar gained back all the losses of the beginning of the day amid Non-Manufacturing PMI in China to 3-month high. Official Chinese Non-Manufacturing PMI increased in February to 55 p. comparing with 53.4 p. in January. Other data was also not so bad. ANZ Job Advertisements in February demonstrated the highest growth rate for over 2 years. AIG Manufacturing Index increased in February to 4-month high. The New Zealand dollar also negated part of losses amid Terms of Trade Index in New Zealand in the 4th quarter by 2.3% q/q to 40-years high.

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