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Dollar up in Asia after China manufacturing aids sentiment

8/31/2017, 10:08:20 AMTrading Strategies
Dollar up in Asia after China manufacturing aids sentiment

 The dollar held stronger in Asia on Thursday with China manufacturing data coming in better-than-expected and investors generally upbeat on the regional view and chance s for U.S. tax cuts later this year.

USD/JPY changed hands at 110.39, up 0.14%, while AUD/USD traded at 0.7907, up 0.05%.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.01% to 92.85.

In Japan, provisional industrial production data for July fell 0.8%, more than a 0.5% decline expected.

The official manufacturing Purchasing Managers' Index in China came in at 51.7 in August, beating expectations, data released Thursday showed.

Analysts polled by Reuters expected China to post official PMI of 51.3 for August, a tick down from 51.4 in July. A reading above 50 indicates expansion, while a reading below that signals contraction. The non-manufacturing, or services, came in at 53.4 in August, down from 54.5.

In Australia, private new capital expenditure for the second quarter jumped 0.8%, well above a 0.3% gain seen and private sector credit for July came in as expected, up 0.5%.

Overnight, the dollar continued its comeback from a two-and-a-half-year slump, buoyed by a pair of economic reports that topped economists’ forecasts, raising investor expectations for solid third-quarter economic growth.

The dollar continued to rebound from a two-and-a-half year slump sustained on Monday, after private payrolls and gross domestic product data topped forecasts.

ADP employment data for August estimated private-sector payrolls rose by 237,000 compared a consensus estimates of 185,000.

The stronger-than-expected private payrolls report, which often serves as a precursor to monthly nonfarm payrolls data slated for Friday, pointed to continued strength in the U.S. labor market, easing expectations the Federal Reserve may abandon its plan to hike rates later this year.

The Commerce Department raised its estimate of second-quarter GDP growth to an annual rate of 3% from 2.6% previously, beating economists’ forecasts of 2.8%.

The rebound in the greenback pegged back the euro, a day after the single currency soared above $1.20 on the back of expectations that the ECB will announce plans at its autumn meeting to taper its bond-buying program.

The greenback pared losses against safe-haven currencies like the yen and Swiss franc, following a dip in geopolitical tensions, as traders weighed President Donald Trump’s somewhat measured response to North Korea’s missile launch over Japan