US Markit PMIs in the US heading lower - USD push stemmed
Just as the USD was pushing for new highs, we saw the Markit PMIs in the US released with the manufacturing index falling to 50.6 vs 52.6, with estimates around a median forecast of 52.7. We also saw services PMIs coming in at 50.9 vs 53.5 forecast, so this has helped stem the tide of USD strength though this may only be temporary.
Naturally, with risk sentiment on the skids, USD/JPY was the notable mover and we have slipped deeper below the 110.00 area though optimistic buyers are coming in swiftly again. We will need to see US equities pick up off their lows if the JPY rate is to hold its ground, but the leading S&P 500 index is over 30pts down on the day so far and we have some key support levels not too far away.
For USD/JPY, 109.50 is the first point of call, but all hinges now on risk sentiment and it is looking a little fraught out there with Oil prices also taking a sharp hit today.
EUR/USD is back around 1.1125-30 after pushing just past the cycle lows of 1.1110 to hit 1.1106 - not a major extension by any means. Cable also pulls back to 1.2650-60, though the commodity-linked currencies are still under pressure all round.