The US dollar hit a one-month high against the Japanese yen during Thursday’s Asian session, rising to 79.15, as investors anticipate the slowing of the Fed’s economic stimulus plans, a forecast which comes in advance of Thursday’s US building and housing report. Analysts expect the report to show signs of improvement, contributing once again to the slew of US reports that have recently been “consistently inconsistent.”
Confusing investors in recent months was the fact that the US consumer price index remained stagnant in July, missing the expected growth of 0.2 percent and remaining stagnant for the second straight month. Also falling was the New York Federal Reserve’s Empire State index of manufacturing which hit negative points unexpectedly in August for the first time in ten months.
Despite these negative signs, however, other indicators have continued to show promise, causing investors to be question about whether the Fed will, in fact, implement a stimulus plan. Among those indicators showing positive signs are the rate of inflation which remained stagnant and the country’s industrial production output which increased by 0.6 percent instead of the expected 0.5 percent forecasted.
The greenback eased against the euro, hitting $1.2303 during Thursday’s Asian market session. European markets are expected to remain relatively flat following yesterday’s holidays and in anticipation of the report that will be released later in the day.