Forex - Dollar mostly higher in Asia, boosted by tapering chatter

The U.S. dollar traded higher against most of its major rivals during Friday’s Asian session as some decent economic data and waning Syrian tensions bolstered the case for a Federal Reserve tapering announcement as soon as next week. 

In Asian trading Friday, EUR/USD inched down 0.03% to 1.3296. after data showed that industrial production in the euro area fell by 1.5% in July, the biggest drop in 12 months. Analysts had forecast a 0.1% decline. 

On a year-over-year basis industrial production fell 2.1% to the lowest level since April 2010, compared to expectations for a 0.1% decline. 

Separately, the European Parliament approved legislation to allow the European Central Bank to oversee banks in the 17 nation currency bloc. ECB President Mario Draghi said the vote was “a real step forward” in establishing a banking union. 

GBP/USD nudged down 0.04% to 1.5799 on what appeared to be some profit-taking after sterling hit fresh multi-month highs against the greenback Thursday. 

USD/JPY rose 0.10% to 99.67 as investors are expecting the Federal Reserve to announce plans to taper its USD85 billion in monthly asset purchases at its Sept. 17-18 meeting.

Stimulus tools such as Fed asset purchases weaken the dollar by driving down borrowing costs, and talk of their dismantling can strengthen the greenback. 

USD/CHF rose 0.08% to 0.9314 while USD/CAD inched up 0.03% to 1.0327 after the International Energy Agency said that oil supplies from the Organization of the Petroleum Exporting Countries fell by 260,000 barrels to 30.51 million barrels per day in August, due to declining output from Libya. 

In U.S. economic news out Thursday, initial claims for jobless benefits fell by 31,000 to 292,000 last week. Economists expected a reading of 330,000 claims. The less volatile four-week moving average fell to 321,250 from 328,750. That is the lowest reading since October 2007. 

AUD/USD fell 0.08% to 0.9265 while NZD/USD nudged down 0.02% to 0.8137. The U.S. Dollar Index rose 0.05% to 81.73.