The global financial markets were influenced by the release of Purchasing Managers’ Index ( PMI data ) across various regions during the Asian trading hours on Thursday. The US Dollar experienced a decline below the key level of 104.00 against the Japanese Yen, primarily due to improving risk sentiment. Meanwhile, investors closely monitored PMI figures from major economies such as Germany, the Eurozone, the UK, the US, Australia, and Japan, which provided insights into the performance of the manufacturing and services sectors.
PMI Data Highlights:
- Federal Reserve Policy Meeting Minutes: The Federal Reserve’s January policy meeting minutes revealed policymakers’ cautious approach towards easing monetary policy. Most officials acknowledged the risks associated with a hasty policy adjustment and emphasized the importance of data evaluation in assessing inflation trends. Despite initial gains in the US Dollar following the release, risk appetite dominated markets later in the day.
Read more: US Dollar Under Pressure Ahead of FOMC Minutes and Fed Speeches
- Nasdaq Futures Surge: Early Thursday, Nasdaq futures surged by over 1.5%, buoyed by positive earnings figures from Nvidia. This optimism contributed to the weakening of the US Dollar as investors sought higher-yielding assets.
Read more: Nvidia’s Earnings Report: A Pivotal Moment for Investors
- Euro Strengthens: The EUR/USD pair gathered bullish momentum, reaching levels near 1.0850, its highest in almost three weeks. However, PMI surveys indicated a continued contraction in the Euro area and German private sector business activities in early February, potentially impacting the Euro’s upward trajectory.
- GBP/USD Momentum: GBP/USD maintained its upward momentum, trading slightly above 1.2650, supported by consecutive positive closes in the preceding days.
- Australian PMI Data: Australia’s Judo Bank Composite PMI for February showed improvement, rising to 51.8 from 49 in January, indicating accelerated growth momentum in the private sector. This boosted the Australian Dollar, with AUD/USD advancing towards 0.6600.
- PMI Figures from Japan: Jibun Bank Services PMI in Japan dipped to 52.5 from 53.1, while Manufacturing PMI declined to 47.2 from 48. Despite broad USD weakness, USD/JPY remained relatively stable above 150.00, reflecting mixed sentiments towards the Japanese Yen.
- USD/CAD Movement: USD/CAD experienced slight losses on Wednesday before sharply declining towards the 1.3450 level in the Asian session on Thursday. The upcoming release of Retail Sales data for December by Statistics Canada could further influence the pair’s direction.
- Gold Prices: Gold prices remained largely unchanged on Wednesday despite the USD’s weakness. XAU/USD hovered around $2,030 early Thursday, but the resilience of US Treasury bond yields limited the precious metal’s upside potential.
Conclusion
The PMI data releases from various regions significantly influenced the movement of currency pairs and other financial assets during the Asian trading session on Thursday. While positive developments, such as the surge in Nasdaq futures and improvement in Australia’s PMI, supported risk appetite and certain currency pairs, concerns over economic contraction persisted, as indicated by PMI figures from Europe and Japan. The USD’s performance was mixed, influenced by both domestic and global factors, highlighting the importance of monitoring economic indicators for informed trading decisions.
