Forex - Aussie slumps on China trade data, yen weaker on BoJ minutes

Investing.com - The Aussie trended weaker on Monday after disappointing trade data from China, the country's top trading partner, while the yen weakened on minutes from the Bank of Japan that showed concern on the pace of bond buying.

AUD/USD traded at 0.7605, down 1.00%, while USD/JPY changed hands at 120.31, up 0.09%. EUR/USD traded at 1.0594, down 0.09%.

A few Bank of Japan board members expressed the view that the BoJ must pay closer attention to developments in the Japanese government bond market and the impact of an aggressive easing policy, according to minutes from the March policy meeting released Monday showed.

"A few members pressed the view that, in pursing QQE, it was important to carefully assess the mechanism of price formation in the JGB (Japanese government bond) market as well as examine and compare the positive effects and side effects of JGB purchases," the minutes showed.

The BOJ is currently buying about ¥80 trillion of JGBs annually.

Earlier, Japan said core machinery orders jumped 5.3% year-on-year in February, well above the gain of 3.7% expected.

Then, China said March exports slumped 14.6%, compared to a 12.0% year-on-year gain expected in March, while imports fell 12.3%, compared to an expectation of down 11.7% and a trade balance surplus of $3.08 billion, well below a $45.35 billion surplus seen.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies,rose 0.11% to 99.74 after the data.

Last week, the euro fell against the broadly stronger dollar on Friday as the diverging monetary policy stance of the European Central Bank and the Federal Reserve continued to pressure the single currency.

Demand for the dollar was underpinned by expectations for higher interest rates, as investors regained confidence that the U.S. economy would continue to recover after recent economic reports pointed to a slowdown at the start of the year.

The greenback received a boost earlier in the week after comments by the presidents of the New York and Richmond Federal Reserve banks made the case for the Fed to begin policy tightening as early as the summer.

Some investors had pushed back the timing of a rate hike until late 2015 after a surprisingly weak U.S. employment report for March.

In the week ahead, Wednesday’s monetary policy announcement and press conference by the ECB will be closely watched. A central bank meeting in Canada will also be in focus. Investors will also be looking ahead to Friday’s reports on U.S. inflation and consumer sentiment.