Forex Asia Review – Dollar advances further against yen

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Euro was under pressure by a broadly stronger US dollar. EURUSD opened in Asia at 1.3080 and slid to 1.3030. The single currency’s decline accelerated after the dollar gained strength following strong US retail sales data and then again late after the Fed acknowledged an improving US economy and made no reference of more quantitative easing.

The dollar surged against the yen, gaining further momentum after the Fed report noted a brighter outlook for the US economy and thereby dimmed chances of further Fed stimulus. USDJPY soared to a high of 83.30, the highest level since April 10.

Meanwhile, weak data from Japan weighed on the Japanese currency. Japan’s industrial growth was revised down in January. Recent easing measures by the Bank of Japan, as well as Japan’s record trading deficit, also weighed on the yen.

The ICE dollar index, which measures the dollar against a basket of six major currencies, moved up to  80.248, compared to 80.231 in late US session trading on Tuesday.

The Australian dollar was little changed against the greenback and has been stuck in a range since Monday. AUDUSD was trading closer to the seven-week trough of $1.0472 touched on Monday.  The aussie, which is a commodity-linked currency, was hurt by falling commodity prices early in the week after China posted a massive trade deficit. China is Australia’s major export market.

Looking ahead, in Europe, euro zone industrial production for January and inflation data for February are due later in the day.