Forex - Japanese yen eases in early Asia, Aussie down on dollar strength

Investing.com - The Japanese yen and Australian dollar eased in early ASia on Monday with no major data releases due as dollar gains cariied over from the U.S.

USD/JPY traded at 109.38, up 0.10%, while AUD/USD traded at 0.8756, down 0.07%. EUR/USD held at 1.2697, down 0.04%.

Last week, the dollar rose to fresh six year highs against the yen and hit 14-month peaks against the euro after data showed that the U.S. economy grew at its fastest pace in two-and-a-half years in in the second quarter.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, rose 0.03% to 85.80.

The dollar was boosted after the Commerce Department reported that U.S. gross domestic product was revised up to 4.6% in the three months to June from a previous estimate of 4.2%. It was the fastest rate of expansion since the fourth quarter of 2011.

The upbeat data added to the view that the strengthening economic recovery may prompt the Federal Reserve to raise interest rates sooner than markets are expecting.

In contrast, the Bank of Japan and the European Central Bank look likely to stick to a loose monetary policy stance amid concerns over faltering economic growth.

In the week ahead, investors will be looking ahead to euro zone inflation data and the outcome of Thursday’s ECB meeting, while Friday’s U.S. nonfarm payrolls report will also be in focus after August’s report fell short of expectations. Wednesday’s Japanese manufacturing data will also be closely watched.

On Monday, in the euro zone, Germany and Spain are to release preliminary data on consumer price inflation, which accounts for the majority of overall inflation.

The U.K. is to release a report on net lending.

The U.S. is to produce data on personal income and expenditure, as well as a private sector report on pending home sales.