The dollar recovered most of Thursday’s loss against the yen last night when encouraging Chinese inflation data took some of the sting from yesterday’s disappointing trade data. Producer prices increased for the first time since 2011 and extinguished the safe-haven bid for the yen, driving USD/JPY back over 104.00 to the session high of 104.40. However, there still remains a thick band of resistance at 104.46, the 62% retracement of the July 21 high of 107.48 and August 16 low of 99.53, and then ahead to Thursday’s 104.62 high.
The euro has gone back on the defensive following Thursday’s respite from the recent sell-off in the joint European currency. EUR/USD continues to be plagued by the possibility for the European Central Bank to continue, or even expand, its quantitative easing program corresponding to rate hike expectations for the U.S. EUR/USD pulled back from 1.1055 last night all the way to 1.100 at the North American open, a loss of 0.50%.
The Australian dollar is the top-performing currency with an impressive 0.80% gain against the U.S. dollar on the upbeat Chinese inflation data. AUD/USD cleared the 50-day moving average at 0.7603 for a seven-day high of 0.7634.