Forex - Yen weaker ahead of initial industrial output, Fed in focus

Investing.com - The yen held slightly weaker Monday in Asia ahead of initial industrial production figures and as investors eyed an interest hike in the U.S. later rather than sooner this year.

In Japan, industrial production is up for February with a provisional fall of 1.8% expected.

USD/JPY traded at 119.22, up 0.07%, while AUD/USD changed hands at 0.7742, down 0.18%. EUR/USD held at 1.0891, up 0.01%.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was quoted at 97.61, down 0.01% in early Asia.

Last week, the dollar ended lower against a basket of other major currencies on Friday as a lukewarm report on U.S. economic growth and comments by Federal Reserve Chair Janet Yellen weighed.

The Commerce Department reported Friday that the U.S. economy expanded at an annual rate of 2.2% in the fourth quarter, unchanged from the preliminary estimate and below economists’ forecasts for an upward revision to 2.4%.

Another report showed that the final reading of the University of Michigan’s consumer sentiment index ticked down to 93.0 this month from a final reading of 95.4 in February.

The dollar showed little reaction after Fed Chair Janet Yellen struck a cautious note on interest rates. In a speech, the Fed chief said a rate hike may be warranted later this year, but added that weakening inflation pressures could force the Fed to delay.

The speech echoed the Fed’s latest policy statement, released on March 18, which indicated that it may raise interest rates more gradually than markets had expected.

In the week ahead, investors will be focusing the U.S. employment report for February, due out on Friday and Monday’s data on personal spending for further indications on the path of monetary policy. Tuesday’s euro zone inflation report will also be closely watched.

On Monday, the euro zone, Germany and Spain are to release preliminary data on consumer price inflation.

Switzerland is to publish its KOF economic barometer.

The U.K. is to produce data on net lending.

Canada is to release data on raw material price inflation.

The U.S. is to release reports on personal spending and pending home sales.