Commodity currencies touched multi-week lows on Wednesday tracking weakness in Chinese demand, while the yen has surged as short-sellers bail out ahead of a central bank meeting.
Commodity currencies touched multi-week lows on Wednesday tracking weakness in Chinese demand, while the yen has surged as short-sellers bail out ahead of a central bank meeting.
Purchasing managers' index figures will be particularly watched in Europe later in the session to see whether they support bets on two European rate cuts by the end of January.
The euro held at $1.0848 in Asia trade and sterling , which could rally if PMIs in Britain surprise to the upside and reduce bets on rate cuts, bought $1.2901.
Markets price a 44% chance of a 10 basis point rate hike in Japan next week and speculators, having also been rumbled by a few rounds of suspected currency intervention from Japan, are closing what had been profitable "carry trades" funded in yen.
Dollar/yen fell nearly 1% to 155.55 overnight and traded nearby at 155.78 early in the Asia session.
