NEW YORK: The yen and Aussie tumbled in early Asian trade on Monday as shareholders look ahead to data on inflation and consumer confidence.
AUD/USD traded at 0.8222, down 0.07%, while USD/JPY changed hands at 117.43, down 0.04%
Australia’s December TD-MI inflation gauge is due at 1030 Sydney (2330 GMT). The gauge rose by 0.1% month-on-month in November to be up 2.2% year-on-year. It is likely the December data could show a month-on-month fall, and possibly take year-on-year to the bottom of RBA’s target band. Also, important in the data will be TD’s forecast for fourth quarter inflation based on this gauge.
Later in the day, Japan’s December Consumer Confidence Survey is due at 1400 in Tokyo (0500 GMT). In November, the consumer confidence index fell 1.2 points to a seasonally adjusted 37.7, posting the fourth straight monthly drop and hitting the lowest since 37.0 in April. At the same time, the Japan Department Stores Association releases December sales. Combined sales at department stores in December are expected to post a ninth straight year-on-year drop as December had one less Sunday compared to a year before.
On Monday, Switzerland is to release data on producer price inflation. In the euro zone, Germany’s Bundesbank is to publish its monthly report and U.S. markets will remain closed for the Martin Luther King Day holiday.
Last week, thehe euro and the dollar pushed higher against the Swiss franc on Friday, a day after an unexpected move by the Swiss National Bank to abandon its currency peg against the euro, while the dollar rose to fresh 12-year highs against the euro ahead of expected monetary easing by the European Central Bank as early as next week.
The euro posted its largest ever single-day decline against the Swiss franc on Thursday after the SNB surprised markets by scrapping the 1.20 per euro exchange rate floor it imposed in September 2011.
The central bank also cut interest rates deeper into negative territory, a move intended to dissuade investors from buying the franc.
SNB Chairman Thomas Jordan said Thursday the exchange rate cap had “protected the Swiss economy from serious harm” but added that maintaining the policy was not “sustainable or sensible in the long term.”
The shock move indicated that the SNB sees a high likelihood that the ECB will implement quantitative easing measures at its upcoming meeting on Thursday.
An interim ruling last Wednesday, which is likely to be accepted by the European Court of Justice, said the ECB was free to pursue a bond purchasing program without legal challenge.
The diverging monetary policy stance between the Federal Reserve, which is poised to raise interest rates and central banks in Europe and Japan has seen the dollar strengthen broadly in recent months.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.04% to 93.04.
In the week ahead, investors will be focusing on Thursday’s outcome of the ECB’s policy meeting and the banks post policy meeting press conference will be closely watched.
Meanwhile, China is to release data on economic growth while the Bank of Japan and the Bank of Canada are also to hold monetary policy meetings.
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