Disappointment amid the unexpected dismal PMI reports from China pushed the US Dollar lower and propped up the safe haven Japanese Yen. The markets’ uncertainty also helped to give a boost to the common currency Euro, which as a low yielding currency, tends to be used for carry-trade investments. The slowdown in China over the past many months has precipitated global growth concerns. China is the second largest economy, behind the US, in the world. Because of that, many of the world’s central banks, including the Fed, had put off potential rate hikes as a more “expensive” currency discourages export trade.
As reported at 10:55 am (GMT) in London, the EUR/USD was up 0.14% to trade at $1.1025; in today’s trading, the pair has ranged from $1.0999 to $1.1055. The USD/JPY pair was lower at 120.5690 Yen; the pair’s low was at 120.2655 Yen while the daily peak was at 120.7100 Yen.
Draghi Comments Reevaluated
In the Eurozone, despite the ECB’s latest rhetoric, the Euro was pushed higher as markets reassessed Mario Draghi’s latest comments. According to analysts at Morgan Stanley, the perception that the ECB head had been suggesting that more stimulus was likely next month was not a certainty. They believe that the ECB would prefer to temper expectations at this time. One analyst at Nomura Securities in Japan agrees that Draghi’s comments had been more neutral than previous ones.
