Investing.com - The yen eased slightly in Asia on Monday despite mildly better than expected GDP figures for the second quarter.
Japan said second quarter economic growth fell 0.4%, less than the drop of 0.5% expected and at an annual pace of down 1.6%, also better than the 1.8% decline seen.
USD/JPY changed hands at 124.34, up 0.04%, while AUD/USD traded at 0.7369, down 0.16%.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose to 96.71, up 0.11%.
Last week, the dollar pushed higher on Friday after the release of upbeat U.S. data on producer prices and industrial output, but still ended the week broadly lower against a basket of major currencies as uncertainty over China weighed.
The greenback was boosted after data showing that U.S. producer prices were higher for a third straight month in July, while factory output increased at the fastest rate in eight months.
But another report showed that U.S. consumer sentiment dipped slightly in this month.
The positive data bolstered the outlook for third quarter growth and underlined expectations for a rate hike by the Federal Reserve as early as next month.
The dollar had weakened broadly earlier in the week after China devalued its currency in a surprise move on Tuesday, in a bid to shore up growth in the flagging economy.
The People’s Bank of China described the move as a “one-off depreciation”, based on a new way of managing the exchange rate that better reflected market forces.
Uncertainty over the impact of the devaluation on global inflation expectations and the outlook for growth in China sparked fears that the Fed could keep short-term interest rates on hold for longer.
The move boosted the euro as investors moved to unwind euro-funded positions on the Chinese currency.
In the week ahead, investors will be awaiting the minutes of the Fed’s July meeting for any indications on its plans to hike interest rates for the first time since 2006.