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Asia Recap: Strong demand for USD across the board

FXStreet (Bali) - Broad-based Yen weakness and US Dollar strength was the main theme in Asia, with the initial volatility dying out mid session.

EUR/USD saw a major breakout of 1.25 barrier, with all hell breaking loose once below, printing a new low of 1.2440 before a 40/45 pips bounce seeking liquidity for a potential retest of 1.25 in the coming hours. GBP/USD saw its lowest at 1.5924 prior to bouncing towards 1.5970 in sync with EUR/USD. AUD/USD re-visited 0.87 before exhibiting a bounce to 0.8730, after a major 55/60 pips down gap. USD/JPY, meanwhile, came within pips of 113.00 only to consolidate circa 112.75.

Fundamentally, over the weekend, China NBS Manufacturing PMI came in at 50.8 in Oct, below forecasts (51.1), adding pressure to the AUD. Australia AiG Performance of Mfg Index rose from previous 46.5 to 49.4 in October. Australia's TD Securities Inflation (YoY) rose from previous 2.2% to 2.3% in October, with the (MoM) increased to 0.2% in October from previous 0.1%. Also in Australia, Sept building approvals saw a big miss, coming at -11% MoM, -13.4% YoY vs -1.0% MM, -0.9% YY exp. Meanwhile, Oct job ads stood at +0.2% MoM. In China, the HSBC Manufacturing PMI came at 50.4 in October, unchanged from the earlier flash reading, and 0.2 bp above 50.2 last month, while China Non-manufacturing PMI fell from previous 54 to 53.8 in October. As per the futures positioning, the main take away appears to be, as TDS notes, that "there is ample room for JPY short positions to rebuild among non-commercial accounts after Friday's shock and awe easing ramp up from the BoJ."

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