ASIA session review: Dollar retreats ahead of Bernanke

Data released (actual, consensus, previous):                     

01:30 GMT Australia RBA Meeting's Minutes                     

08:30 GMT UK Core Consumer Price Index (YoY) (Jun) 2.3%    2.3%    2.2%        

08:30 GMT UK Consumer Price Index (MoM) (Jun) -0.2%    -0.1%    0.2%        

08:30 GMT UK Consumer Price Index (YoY) (Jun) 2.9%    3.0%    2.7%        

08:30 GMT UK DCLG House Price Index (YoY) (May) 2.9%    2.9%    2.6%        

08:30 GMT UK Producer Price Index - Output (YoY) n.s.a (Jun)2.0%    1.9%    1.2%        

08:30 GMT UK PPI Core Output (MoM) n.s.a (Jun)  0.0%    0.1%    0.1%        

08:30 GMT UK PPI Core Output (YoY) n.s.a (Jun) 1.0%    1.1%    0.8%        

08:30 GMT UK Producer Price Index - Input (MoM) n.s.a (Jun)  0.2%    -0.2%    -0.6%       

08:30 GMT UK Producer Price Index - Input (YoY) n.s.a (Jun)  4.2%    4.2%    1.8%   

08:30 GMT UK Producer Price Index - Output (MoM) n.s.a (Jun)  0.1%    0%    0%        

08:30 GMT UK Retail Price Index (YoY) (Jun)  3.3%    3.4%    3.1%        

08:30 GMT UK Retail Price Index (MoM) (Jun)  -0.1%    0.0%    0.2%   

The dollar weakened amid speculation Federal Reserve Chairman Ben Bernanke may seek to damp investor expectations of a reduction in stimulus when he speaks before Congress tomorrow.

But its losses against the euro were likely to be checked if euro zone inflation data later in the session shows subdued price pressures, as expected. That will add to the view that the European Central Bank will keep interest rates low and may even cut them further to aid an economic recovery.

EURO:

The euro gained versus the yen before a report economists said will show investor confidence in Germany rose this month.

"Recent data out of Germany has been disappointing, so if the ZEW falls short of expectations we could see that undercut the euro," said Jane Foley, senior currency strategist at Rabobank.

#EUR/#USD is capped near $1.3080 with initial resistance is placed at $1.3120 (Jul 11 hourly high). A break above $1.3208 (high Jul 11) would expose $1.3255 (high Jun 21). Below $1.3000 next support comes at $1.2966 (low Jul.11) ahead of $1.2949 (high Jul.10) and finally $1.2755 (low Jul.1).

POUND:

Data released in UK showed in the year to June 2013 UK PPI – Output n.s.a. grew 2%, in comparison with a increase of 1.2% the previous month. Analysts expected slightly less growth of 1.9%. On a monthly basis UK PPI – Output n.s.a. rose 0.1% in June.

Annual UK PPI – Input n.s.a. rose 4.2% in June, compared with May's 1.8% increase, in line with consensus.

GBP/USD is currently quoted at $1.5122, consolidatin within the narrow range. Resistance is near $1.5220 (Jul 11 high), then - at $1.5300. Minor support comes at $1.5080, then - at $1.5020 (Jul 15 lows) and $1.4780 (Feb 28’2010 lows).

YEN:

Yen consolidates within the narrow range.

USD/JPY remains under Y100.00. Support comes at recent lows on YY98.20. Below support comes at Y97.77/70, ahead of Y97.00 (June 25 low). Initial resistance comes at Y99.70-Y100.00, then - at  Y101.00 and Y101.50.

COMMODITY CURRENCIES

AUSSIE: Australia’s dollar strengthened as investors pared bets the Reserve Bank will cut interest rates after the minutes of its last meeting released today said the recent drop in the currency may boost inflation.

DATA AHEAD:

At 12:30 GMT  US Consumer Price Index ( 1.5% vs 1.4%) will be released, ahead of US Industrial Production due at 13:15 GMT (0.3%  vs   0.0%).

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