* China PMI steady at 51.4 in Nov vs expected reading of
* Aussie and kiwi both firmer in reaction to China data
* Sterling shines on expectations of early BoE tightening
* Yen still vulnerable after big fall last month
* Euro supported after positive inflation and jobs data
By Ian Chua and Hideyuki Sano
SYDNEY/TOKYO, Dec 2 Commodity currencies gained
sharply on Monday following positive data from China while the
British pound soared on expectations of early policy tightening
by the Bank of England.
Investors bought the Australian and New Zealand dollars
after a survey on Sunday showed China's factory growth held at
an 18-month high in November, an outcome that was slightly ahead
of expectations. Both Australia and New Zealand are highly
leveraged to China's economic cycle.
Sentiment was buoyed further after a similar Chinese private
manufacturing survey published on Monday was revised up from
The Aussie rose 0.5 percent to $0.9150 and the kiwi
advanced 0.9 percent to $0.8195.
Sterling jumped to a two-year high of $1.6443,
retaining its strength in recent weeks on the back of solid UK
economic data and expectations that the Bank of England could
raise rates earlier than most other major central banks.
The pound also hit a 10-1/2-month high against the euro at
82.75 pence and a five-year high of 168.55 yen.
By contrast, the Japanese currency continued to struggle
after slumping more than 4 percent in November against the
dollar and euro.
Investors have been selling the low-yielding yen to buy
riskier assets in carry trades made attractive by the Bank of
Japan's ultra-loose monetary policy.
BOJ Governor Haruhiko Kuroda said on Monday that he would
not hesitate to adjust policy, fanning speculation the bank
could take more easing steps next year.
The dollar scaled a six-month high of 102.65 yen early on
Monday, though it later dipped on profit-taking following news
that one of the key architects of Japan's aggressive stimulus,
Economics Minister Akira Amari, was hospitalised.
The greenback last stood at 102.32 yen, while the
euro was at 139.20 yen, near a five-year high of
139.705 hit on Friday.
The euro was supported after Friday's euro zone inflation
and employment data dented speculation over further monetary
easing by the European Central Bank.
"It is becoming a consensus that the ECB will not take any
action this week. I guess the euro will also likely be supported
by repatriation flows ahead of the year-end," said Takahiro
Suzuki, vice president of forex at Nomura Securities.
But some traders suspect euro/yen could take a breather in
the lead-up to the ECB policy meeting on Thursday, where
investors will be scouring for clues to the central bank's next
"The focal point will be the ECB forecasts for HICP
inflation in 2014 and 2015," analysts at BNP Paribas wrote in a
note to clients, referring to EU-harmonised consumer prices.
"The profile of inflation will dictate how the euro reacts
this week. The softer the forecast, we would expect euro to
remain increasingly under pressure."
Against the dollar, the euro was little changed at $1.3601
, not far from Friday's one-month high of $1.3622.
It was struggling to find enough momentum to break above
chart resistance at $1.3623, the 61.8 percent retracement level
of its late October to early November slump.