The buck traded mostly sideways against the majors despite weak economic data out of the Euro-zone, as traders await US consumer prices and jobless claims data out in the NY morning. German GDP fell -0.5% QoQ in 2Q after a 1.3% increase in 1Q while French GDP fell -0.3% from 0.4% for the same period. This was the first contraction in the French economy in more than five years. This also helped nudge the overall Euro-zone GDP composite to -0.2% in 2Q after a 0.7% increase prior.

The inflation data across the pond was relatively tame as well. German consumer prices for July came in as expected, rising 0.6% on the month and leaving the annual rate steady at 3.3%. Euro-zone CPI, however, surprised to the downside by falling -0.2% on the month. This left the annual rate at 4.0% from a previously estimated 4.1%.

Despite the generally weak data and tame inflation, EURUSD managed to extend gains somewhat. The pair opened the session near 1.4885 and was sitting near 1.4905 at the close. This USD selling helped boost GBPUSD from an open near 1.8680 to a close around the 1.8725 mark.

USDJPY was bid as the yen crosses rallied on the overseas stock market increases. Europe was up about 0.5% at last look while Asia rose about 0.6% overnight. USDJPY rose from an open near 109.45 to a close around 109.70 in London. We would expect better than expected US jobless claims data along with higher than expected inflation to boost the pair.

Upcoming Economic Data Releases (Asia Session) Prior Estimate

8/14/2008 12:30 GMT US Consumer Price Index (MoM) JUL 1.1% 0.4%
8/14/2008 12:30 GMT US CPI Ex Food & Energy (MoM) JUL 0.3% 0.2%
8/14/2008 12:30 GMT US Consumer Price Index (YoY) JUL 5.0% 5.2%
8/14/2008 12:30 GMT US CPI Ex Food & Energy (YoY) JUL 2.4% 2.4%
8/14/2008 12:30 GMT US Initial Jobless Claims AUG 9 455K 445K
8/14/2008 12:30 GMT US Continuing Claims AUG 2 3311K --
8/14/2008 14:30 GMT CA Bank of Canada Releases Review
8/14/2008 18:30 GMT US Fed's Stern Speaks on Financial Shock