USD/JPY on a session high after series of data from the United States

On Tuesday US dollar rose to a fresh session high versus the Japanese yen after US inflation data met expectations and thus, gave the Federal Reserve Bank leeway to continue asset purchases.

USD/JPY pair extended gains, reaching 95.74, currently the session high, after which consolidation followed at 95.60.

It was reported earlier that consumer prices in the United States rose by a mere 0.1% in May due to higher expenditures on houses and energy. Energy prices added 0.4% despite the fact that gasoline prices remained unchanged. Prices of first necessity goods dropped by 0.1%. Core Consumer Price Index (CPI) in the United States, that excludes volatile elements like food and energy costs, registered a 0.2% increase in May. Preliminary estimates, regarding both Consumer Price Index and Core Consumer Price Index, pointed an increase by 0.2%. In annual terms, consumer inflation climbed to 1.4% in May in line with estimates and higher in comparison with the recorded 1.1% during the previous month. Core consumer price indicator remained stable at 1.7% in May, where it stood also in April. Data implied that consumer prices rose for the first time in three months in May. Inflation data is a crucial component to the economic situation in the country, in terms of FEDs easing program course, as it currently pours 85 billion USD into economy on a monthly basis. More significant asset purchases along with close to zero interest rates is a combination, which strives to stimulate economic growth and respectively, add new job positions.

Additionally, Housing Starts indicator in the United States increased in May by 6.8%, compared to April, supported by multifamily house construction. The indicator reached 0.914 million units, recording an annual increase by 28.6%. Multifamily house construction alone rose by 24.9%. On the other hand, single-family house construction registered a more moderate increase, by 0.3%. Preliminary estimates, regarding US Housing starts, showed a 11.4% increase to 0.950 million units, while Aprils data was revised up to 0.856 million.

Investors were looking ahead to the outcome of Federal Reserve Bank’s monthly meeting on Wednesday amid uncertainty over the bank’s next move.

Meanwhile, US dollar erased earlier losses against the euro, as EUR/USD slid by 0.10% to 1.3351 from a fresh session high at 1.3399. The greenback advanced to one-week highs against the British pound also, with GBP/USD pair decreasing by 0.92% to 1.5576.

Ultimately, the dollar index, which tracks the performance of the US dollar against a basket of six major currencies, rose by 0.40% to 81.16.