Data shown U.S. manufacturing sector grew faster than expected and China’s factory regained momentum lifted stocks, commodities and higher-yielding currencies, USD/JPY was steady at 84.55 day high yesterday as Japan Prime Minister candidate Ozawa said action was needed to stem rapid rises in JPY and said intervention just by Japan might not have much effect. AUD was weighed after Australia released Trade Surplus totaled $A1.888 billion in July below market expectations prompted Japanese retail margin traders cut net long positions in AUD against JPY and JPY gained in talk of fund managers of Japanese mutual funds or toushin sold overseas assets to prepare for possible hefty cancellation of toushin at end-September by retail investors, USD/JPY slipped to 84.01 day low despite weekly U.S. Jobless Claims fell to 472,000 and Durable Goods Orders revised up 0.4% in July but Factory Order up 0.1% only and Pending Home rose 5.2% in July pressured USD in ahead of U.S. job report on today. Forecasts USD/JPY will be heavy at 84.50-80 with support at 83.80-84.00 today. 

Unemployment Rate in France fell to 9.7% in the second quarter while Producer Price Index (PPI) rose 4.0% in July and Gross Domestic Production (GDP) revised up 1.9% in the second quarter, EUR/USD rallied from 1.2777 day low yesterday supported by healthy results in Spanish and French bond auctions added that European Central Bank (ECB) raised economic growth forecasts. ECB left interest rates at 1.0% as expected and extended its liquidity safety-net on worries about vulnerable banks, EUR/USD extended gains to 1.2848 day high as decision and remarks from ECB President Trichet were seen positive to EUR. Forecasts EUR/USD will be capped below 1.2830-60 with support at 1.2700-30 today. 

Mortgage lender Nationwide said British house prices fell 0.9% more than expected in August at its sharpest droop in two months, GBP/USD came under pressure from 1.5455 day high yesterday. Data shown growth in Britain’s construction sector slowed after the Institute of Purchasing and Supply construction Purchasing Manager Index (PMI) slipped to 52.1 in August, GBP/USD declined to 1.5351day low in await U.S. job data on today. Forecasts GBP/USD will be traded with resistance at 1.5420-50 and supports 1.5300-30 today.

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