Forex - Aussie weaker in early Asia with focus on flash HSBC China PMI

Investing.com - The Australian dollar ticked down Wednesday in Asia ahead of a flash China manufacturing survey by HSBC and a market re-open after a week-long holiday.

AUD/USD traded at 0.7827, down 0.04%, while USD/JPY changed hands at 118.97, up 0.01%. EUR/USD traded at 1.1341, up 0.01%.

Markets in China re-open today after the Lunar New Year holidays which started last Wednesday.

To start, the HSBC China February flash manufacturing PMI is due at 0945 local time (0145 GMT).

For the HSBC PMI, investors are expecting a drop to 49.5 from January's final 49.7, particularly given the timing of the Chinese New Year holiday which, despite seasonal adjustments, may depress survey readings.

Australia's fourth quarter wage price index and construction work done are due at 1130 Sydney time (0030 GMT). For wage prices, a 0.6% quarter-on-quarter rise is seen for an annual pace of up 2.5%, compared to a 2.6% gain in the third quarter.

For construction work done, the fourth quarter estimate is a drop of 1.2%.

Overnight, the dollar trimmed gains against a basket of other major currencies on Tuesday, after downbeat U.S. consumer confidence data and as Federal Reserve Chair Janet Yellen said that rates will remain on hold for at least the next couple of meetings.

In a report, the Conference Board, a market research group said its index of consumer confidence fell to 96.4 this month from a reading of 103.8 in January, whose figure was revised up from a previously reported 102.9. Analysts expected the index to decline to 99.6 in February.

Meanwhile, in prepared remarks released before her testimony to the Senate Banking Committee, Fed Chair Yellen said it was "unlikely" that economic conditions would warrant an interest rate increase for "at least the next couple of FOMC meetings".

She added that if the economy keeps improving as the Fed expects it "will at some point begin considering an increase in the target range for the federal funds rate on a meeting-by-meeting basis."

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was quoted at 94.56.

The euro erased earlier losses after Greece’s package of proposed economic reforms was approved by its euro zone creditors on Tuesday, securing Athens an extension of its bailout for another four months.

The package of measures includes taxation and public spending reforms and consolidating pension funds to reduce costs. Athens also pledged not to unwind state privatization programs and to stick to budget targets.

Greece’s current €240 billion bailout was scheduled to expire on February 28.

Earlier Tuesday, official data showed that euro zone consumer price inflation fell 0.6% last month, in line with expectations and unchanged from a preliminary estimate. Euro zone inflation declined by 0.2% in December.

The rate remains firmly below the European Central Bank's target of near but just below 2%.