Article by ForexTime
Markets began 2016 on a risk off tone across Asia Pacific due to disappointing data out of China and China’s central bank allowing the currency to weaken again. Data showed China’s manufacturing sector continued to contract in December. Also, tensions in Saudi Arabia led to jittery investors.
This led to broad USD weakness at the Asian open. USD/JPY was pushed down to 119.32 in late Asian session trading.
Due to weak USD across the board, this helped the EUR/USD to jump to 1.0880 at the open before heading higher to test 1.0900. If risk aversion continues to rise EUR/USD should stay supported
AUD/USD gapped higher to 0.7308 in early Asia as USD broadly weakened but the aussie then proceeded to fall hard as China concerns gripped the market. The Caixin PMI missed badly, and so the USD/CNY was fix higher than forecast as Chinese equity markets tumbled (SSEC fell 4%). The AUD was sold hard against the JPY and EUR to lead AUD/USD lower to 0.7208 – more than 1% lower than morning high. AUD remains vulnerable if China concerns grip investors and leads to risk selling.
The New Zealand public holiday helped exacerbate NZD sell-off from 0.6844 open to 0.6754 low. China concerns are at forefront.
Free Reports:
In equity markets, Asian stock markets fell sharply as China concerns deepened. The Nikkei was down 2.60% into the afternoon while the Shanghai Composite was down close to 4.0%. The Australian ASX was down 0.35% after being 0.6% higher in early trading.
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