The Yen traded at the highest level in close to four weeks against the U.S. Dollar as the Institute for Supply Management’s Factory Index showed the biggest decline in U.S. manufacturing since July 2011. The Index posted at 51.3 in March after having reached 54.2 the previous month. This not only bolstered demand for Forex safe havens, it also reduced the possibility the Federal Reserve will slow down its asset-purchasing program. The Yen remained strong as world currency market investors anxiously await the central bank’s upcoming policy meeting scheduled for April 3rd. Also, the Tankan index confirmed that optimism at large Japanese companies improved. Most of the price fluctuations that took place yesterday happened on the back of lackluster U.S. data since trading was light due to the Easter holiday.
Meanwhile, the Euro currency weakened versus the Yen in anticipation of today’s economic reports which are expected to reveal that unemployment in the region rose to a record 12% in February. The European Central Bank will meet this week to make a decision on whether to raise or cut benchmark interest rates. The shared currency gained against the greenback on speculation the Federal Reserve won’t taper its monetary stimulus given the disappointing metrics on manufacturing.
Elsewhere, Australia’s Dollar dipped to a one-week low after China announced that its factory output fell short of previous estimates. The gauge that tracks manufacturing in China, which is Australia’s biggest trading partner, stood at 50.9 for March.