Asian session: The yen fell

01:00 Australia HIA New Home Sales, m/m June +1.6% +3.4%

01:00 China Manufacturing PMI July 50.1 49.8 50.3

01:30 Australia Import Price Index, q/q Quarter II 0.0% +1.9% -0.3%

01:30 Australia Export Price Index, q/q Quarter II +2.8% +0.3% -0.3%

01:45 China HSBC Manufacturing PMI (Finally) July 47.7 47.7 47.7

The yen fell against all of its 16 major peers as a rebound in Asian stocks reduced demand for Japan’s haven assets.

The greenback traded 0.5 percent from a six-week low versus the euro after the Federal Open Market Committee said persistently slow inflation could hamper U.S. economic expansion, spurring bets monetary stimulus will be maintained. Chairman Ben S. Bernanke and his colleagues cited “further improvements” in the labor market, while saying economic growth was “modest” and not indicating the timing for a trim to bond purchases. They are debating whether the economy is strong enough to warrant scaling back stimulus even as the jobless rate persists at 7.6 percent and inflation through May was well below their longer-run target of 2 percent.

The pound touched the weakest in more than four months versus the euro before policy decisions by the Bank of England and the European Central Bank.

Australia’s dollar touched the lowest in almost three years as bets the Reserve Bank will cut interest rates next week outweighed better-than-expected manufacturing data out of China, the nation’s biggest trading partner. China’s manufacturing PMI was at 50.3, the National Bureau of Statistics and China Federation of Logistics and Purchasing said today in Beijing. That compared with the 49.8 median forecast of 35 analysts in a Bloomberg News survey and June’s 50.1 level.

EUR / USD: during the Asian session the pair fell to $ 1.3270

GBP / USD: during the Asian session the pair fell to $ 1.5150

USD / JPY: during the Asian session the pair rose to Y98.35

The UK also releases the CIPS/Markit Manufacturing PMI at 0828GMT. For central banks, the Bank of England is first up, at 1100GMT, although analysts are near-united in the view that the MPC will not vote to expand its 375 billion quantitative easing program. The European Central Bank decision is due at 1145GMT but the successful foray into forward guidance along with positive signs from the real economy point to a steady hand. The monthly press conference follows at 1230GMT and ECB President Mario Draghi should keep the door for further interest rate cuts wide open while investors pay particular attention to his comments on lending as a first signal that the Eurotower may be gearing up for further action. Also at 1230GMT, US initial jobless claims are expected to rise by 2,000 to 345,000 in the July 27 week, as second straight increase. The final US Markit PMI then follows at 1258GMT, while the weekly Bloomberg Comfort Index is due at 1345GMT. Further US data sees the 1400GMT release of both Construction Spending and the latest ISM Index.  Late US data see the 2030GMT release of M2 Money Supply data.