Previous session overview

The euro rose slightly against the yen and the dollar in Asia Tuesday as firm Asian equities raised non-Japanese investor confidence toward the risk-sensitive unit, and traders said the euro may climb a tad more later if global shares follow Asia's lead.

Also helping the euro were last week's results from stress tests on European banks that didn't elicit any big negative surprises.

Concerns that the tests might have lacked enough rigor appeared to subside, while positive economic data from the U.S. and Europe supported riskier assets. The safe-haven dollar dipped to its lowest level since early May against a basket of its competitors as U.S. stocks rallied and demand increased for higher-yielding currencies.

The euro climbed to intraday highs of JPY113.20 and USD1.3018, compared with JPY112.91 and USD1.2297 in New York late Monday. As of 0450 GMT, the unit was at JPY113.02 and USD1.2998.

The U.S. unit was at JPY86.99 as of 0450 GMT from its New York overnight level of JPY86.89. The ICE Dollar Index, which tracks the dollar against a trade-weighted basket of currencies, was at 81.965 from 82.022.

The British pound's strength was showcased yet again as it climbed over 1% vs. the USD on the day, boosted by data showing Britain's economy grew almost twice as fast as expected in Q2. Data showed gross domestic product jumped 1.1% on the quarter, the strongest growth in four years and almost twice as fast as forecasts for 0.6%.

The Australian dollar was higher late in Asia Tuesday ahead of all-important local inflation data Wednesday which analysts expect to make or break the case for a rate hike by the central bank next week.

Market expectation

Investors are waiting for U.S. economic reports to assess the health of the world's biggest economy. Better-than-expected figures may lift stock markets, pushing up the euro toward JPY113.50 and USD1.3050 in the global day, dealers said.

Of interest to the market are the Standard & Poor's Case-Shiller Home Price Index for May and the consumer confidence index for July, due later in the day. The Federal Reserve's Beige Book on Wednesday and second-quarter gross domestic product data Friday will also draw attention.

Economists surveyed tip the consumer confidence index, due at 1400 GMT, to log 50.8 in July from 52.9 in June.

Still, traders said the euro's long-term outlook remains grim due to expectations for the currency zone's stagnant financial sector and economy.

European stock markets are expected to open a little lower Tuesday, as market participants cautiously look to key corporate earnings before adding further risk.

Disclaimer: the data made available by Dukascopy Bank SA is for informational purposes only. Publication of this data by Dukascopy Bank SA does not constitute provision of investment advice and Dukascopy Bank SA assumes no responsibility with regard toany information, forecast or recommendation herein contained and assumes no responsibility with regard toany losses resulting from any activities conducted the basis of this data, including any investment decisions.

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