Asian session review: US dollar rose against the yen

The US dollar rose against the yen, updating yesterday’s high, reaching Y103.25. Support for the pair gave recent comments by Fed officials that increase the likelihood of a rate hike.

The yen was also affected by negative data on Japan’s industrial production. As reported today the growth of industrial production in Japan in July was flat, after rising in June by 2.3%. Analysts had expected an increase of 0.8%. On an annual basis, industrial production fell by -3.8%, lower than the previous value of -1.5%.

Industrial production – an indicator published by the Ministry of Economy, Trade and Industry, that reflects the activity of production plants, factories and mining companies. This indicator has attracted attention because it is the main indicator of the strength and health of the manufacturing sector.

The data published today indicate the slowdown of industrial production growth, despite the efforts of Prime Minister Abe to revive the economy.

Also today, was published the data on the number of housing starts, which in July increased 8.9%, after falling -2.5% in June. This indicator reflects the strength of the Japanese housing market, but also gives an idea about the general state of the economy, because it is very sensitive to changes in the business cycle.

Despite the increase in the number of constructions, the volume of orders in the construction sector decreased year on year by 10.9%, after declining by 2.4% in June.

The pound rose against the dollar for a short time after the publication of more positive than expected data on UK consumer confidence from the GfK Group, which in August fell to -7, while analysts expected a decline to -8. Despite the decline, the index was better than the value of July, when the indicator fell to -12. Consumer confidence is weaker than it was prior to the vote on 23 June when the index stood at -1.

The index of consumer confidence from the GfK Group is a leading indicator that reflects the level of consumer confidence in economic activity. The index is based on a survey of 2,000 people, conducted from August 1-16.

The Australian dollar strengthened slightly on data of private sector lending. Report of the Reserve Bank of Australia showed that the amount of money borrowed by Australian private sector increased by 0.4% in June, after rising 0.2% in May. In annual terms, the indicator fell by 0.2% and amounted to 6.0%. This indicator shows whether the private sector can afford large expenses that will support economic growth and is considered an indicator of business conditions and economic situation in Australia as a whole.

EUR / USD: during the Asian session, the pair was trading in $ 1.1135-1.1165 range

GBP / USD: during the Asian session, the pair was tading in $ 1.3065-1.3115 range

USD / JPY: during the Asian session, the pair was trading in Y102.85-103.20 range

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