Dollar Drop

On Friday, the dollar plunged compared to the yen and made progress compared to the euro, as the doubt after the Brexit vote remained and disappointing Chinese manufacturing activity statistics pushed safe-haven demand.

EUR/USD dropped 0.29 percent to 1.1073.

Markets managed to improve from Britain’s surprise decision  to leave the European Union the previous week.

On Thursday, Bank of England Governor, Mark Carney indicated that more stimulus may be required over the summer, increasing the  anticipations for an approaching rate reduction.

Temporarily, market sentiment declined after the  statistics presented that China’s Caixin manufacturing purchasing managers’ index dropped  48.6 in June from 49.2 the prior month, against the expected 49.1  downtick.

Together, China’s official manufacturing PMI came in at 50.0 previous month from 50.1 in May, in line with the analysts' anticipations.

USD/JPY dropped 0.48 percent to trade at 102.71. In Japan, earlier data presented that household expenditure dropped 1.5 percent in May, against the anticipated 0.2 percent slip.

A separate report presented that Tokyo’s consumer price index dropped an annualized percentage of 0.5 precent in June, whereas core CPI, that eliminates fresh food, also fell by 0.5 percent.


Furthermore, the Bank of Japan stated its Tankan manufacturing index held fixed at 6 in the 2nd quarter, beating the anticipated reading of 4.

The U.S. dollar index, which gauges the greenback’s strong point compared to a trade-weighted basket of six major currencies, increased 0.15 percent at 96.09.


On Friday, the pound was almost unmoved compared to the U.S. dollar, in spite of the announcement of upbeat U.K. manufacturing data as doubt after the Brexit vote and news of a possible U.K. rate reduction this summer limited the sterling’s increase.

GBP/USD touched the session peak of 1.3350 throughout the European morning trade, the pair then consolidated at 1.3315.

Cable was expected to find support at 1.3318, the lowest since June 27 and resistance at 1.3535, the peak since June 29.

Research group Markit stated that its U.K. manufacturing, purchasing manager's index increased 52.1 the previous month from a reading of 50.1 in May. That was its peak level since January 2016.Analysts had anticipated the index to decline back into contraction at 49.9 in May.

Sentiments declined after the downbeat Chinese manufacturing statistics sparked fresh concerns over the halt in the world’s 2nd biggest economy.

Sterling was also stable compared to the euro, with EUR/GBP at 0.8339.

Yen Soars In Asia

On Friday,  the yen made additional increases in Asia and the Aussie plunged on mixed Purchasing Managers Index data from China as investors digested a busy regional data day and seemed to take a longer vision on the effect of Brexit.

USD/JPY moved hands at 102.90, down 0.31 percent after the data, while GBP/USD traded at 1.3338, up 0.21 percent. AUD/USD traded at 0.7448, down 0.04 percent.


In Japan, national core CPI for May dropped 0.4 percent YoY as expected. Also, household expenditure for May declined 1.1 percent YoY, lower than the 1.4 percent drop seen, however, the MoM number dropped 1.5 percent, more than the projected 0.2 percent decrease.

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