Japanese Yen rises due to political issues. German economic data undermine EUR

On Monday the Japanese yen gained in early Asian trade with the events in Eastern Europe and Middle East on investors minds and safe haven assets sought.

USD/JPY traded at 101.79, down 0.04%, while AUD/USD held at 0.9399, up 0.04%, and the US dollar index fell 0.05% to 81.11.

This weekend the Ukrainian government said that it regained control of the separatist Lysychansk after several days of fierce fighting, a move it said would lead the official power to take back a string of other important rebel-held positions.

Regarding the action in the Middle East, U.S. Secretary of State John Kerry failed to secure a temporary cease-fire between Israel and the Palestinian militant group Hamas after nearly a week of shuttle diplomacy in the region, but pledged to continue his efforts over the weekend.

As this Monday is marked by the important Muslim Eid holiday, markets in many parts of Southeast Asia are closed.

At the same time, the day is likely to be quiet, as there are no major releases scheduled in the region's major economies such as Japan and China.

Last week, the euro fell to eight month lows against the dollar as weaker than expected. German economic data underlined concerns over the diverging monetary policy path between the European Central Bank and other central banks. The drop in the euro came after a report showed that Germany’s Ifo business climate index dropped to 108.0 in July, missing estimates for a reading of 109.4. It was the third consecutive monthly decline.

Sentiment on the single currency was also hit by concerns that tougher sanctions on Russia would have a negative impact on the outlook for growth in the currency bloc, which has close trade ties with Moscow.

The greenback was boosted by better than expected data on U.S. durable goods orders for June.

The Commerce Department reported a rise of 0.7% in orders of long lasting goods such as machinery and electronic products, compared to forecasts of 0.5%.

During this upcoming week, investors will be focusing on Wednesday’s revised reading on U.S. second quarter growth, while Friday’s nonfarm payrolls report will also be in focus.

Wednesday’s Fed statement will also be closely watched for any indications that the central bank is moving closer to raising rates.

On Monday, it is also expected that the U.S. releases data on pending home sales.