Asian session: The yen weakened

02:30 China HSBC Manufacturing PMI (Feb) 51.7

03:30 Australia RBA Interest Rate Decision (Mar) 4.75%

The yen weakened against all of its major counterparts as economic data in Asia and the U.S. added to signs the global recovery is gathering momentum, damping demand for safer assets.

Japan’s currency fell for a second day versus the euro as the economic data spurred gains in Asian stocks, boosting the appeal of higher-yielding securities. 

The euro completed a third monthly advance versus the dollar in February before the ECB, which has kept its key interest rate at 1 percent since May 2009, holds its next policy meeting on March 3.

ECB governing council member Mario Draghi said on Feb. 26 that inflation pressures are forcing policy makers to focus more on the timing of interest rate increases. The euro has gained 3.2 percent against the greenback this year amid prospects the ECB will precede the Federal Reserve in raising rates.

Fed Chairman Ben S. Bernanke is scheduled to deliver a semiannual report on monetary policy today to the Senate Banking Committee and is due to testify to the House Financial Services Committee tomorrow.

EUR/USD: the pair bargained within the limits of $1,3785-$ 1,1,3830.

GBP/USD: the pair become stronger in around $1,6320.

USD/JPY: the pair become stronger in around Y82,20.

At 1000GMT, the flash measure of EMU HICP is expected to come in at a reading of 2.4% y/y, while at the same time, the unemployment rate is expected to remain steady, at 10%. 
UK data continuess at 0928GMT with the PMI Manufacturing data for February, which is expected to edge lower, but remain at a reading of 61.0. This is followed at 0930GMT by BoE Lending to Individuals and Final M4 Data.
US data starts at 1245GMT with the weekly ICSC-Goldman Store Sales data, which is followed at 1355GMT by the weekly Redbook Average. The main event for Tuesday will likely be at 1500GMT, when Federal Reserve Chairman Ben Bernanke gives his semi-annual monetary policy report to the Senate Banking Committee in Washington. US data also heats up at 1500GMT, when ISM manufacturing data is expected to fall to 60.5 in February, continuing its upward trend. The regional data already released have pointed to continued expansion. At the same time, construction spending is expected to fall 0.8% in January following the residential-related plunge in December. Housing starts rose sharply in the month, suggesting that residential construction rebound in the month.
n other US events for Tuesday, Treasury Secretary Tim Geithner testifies on GSEs to the House Financial Services Committee, while auto-maker data is expected to show that domestic-made light vehicle sales rose slightly to a 9.5 million annual rate in February after rising slightly to 9.4 million in January. Seasonal factors are less accommodative than in January.