The euro slipped against an advancing dollar on Thursday after data revealed the U.S. economy grew at a faster clip in the second quarter than markets were expecting, which firmed expectations that the Federal Reserve will begin hiking interest rates next year. The euro, meanwhile, continued to see residual support after German Finance Minister Wolfgang Schauble said comments made by European Central Bank President Mario Draghi suggesting fiscal policy could spur growth were "overinterpreted."
The pound trimmed gains against the U.S. dollar on Thursday, reapproaching recently hit five-month lows as demand for the greenback found broad support after upbeat U.S. economic reports. In the U.K., the Confederation of British Industry earlier reported that realized sales rose to a six-month high of 37 this month, from a reading of 21 in July, compared to expectations for a rise to 27. The pound reached a two weeks high versus the euro just 21 days before Scotland votes on whether to become independent from the U.K., showing investors are disregarding concern the decision will harm Britain’s currency.
The Japanese yen strengthened further in early Asia on Friday after consumer price, unemployment and household spending data presented a mixed economic picture. National core CPI data for July, year-on-year in Japan rose 3.3%, meeting expectations and posting a 14th straight gain. At the same time, the unemployment rate edged higher to 3.8%, compared to an expected 3.7% for July. Household spending fell 5.9%, slumping more than a forecast 3.0% year-on-year drop in real terms and notching a fourth consecutive year on year drop. Industrial production is forecast at +0.3% gain month on month, the first rise in two months, while retail sales gained a forecasted 0.1%, breaking straight falls following a sales tax hike in April to 8% from 5%.