Weekly Foreign Exchange market Summary 17/11/09

USD - The greenback once again trekked along an uneven path last week as market participants sought to garner insight into the health of the world's largest economy and the direction of its currency, from key economic drivers and market risk sentiment.  The dollar remained largely range-bound during the first half of last week, breaking out of its range to stage a brief rally Thursday, on the back of improving Jobless Claims data (initial: 502K during 11/7 wk. vs. 514K prior; continuing: 5631K vs. 5770K prior).  However, the ephemeral dollar burst was quickly squelched by the ensuing Trade Balance (-$36.5B in Sep. vs. -$30.8B prior) and U. of Michigan Confidence (66.0 in Nov. vs. 71.0 exp.) reports-ultimately causing the dollar to close the week lower than when it opened.  As global risk sentiment has ostensibly been improving, the greenback has been experiencing selling-pressure to fund "carry trades" for higher-yielding investments.  Intra-day dips, notwithstanding, the underlying trend of the DJIA has been upward (10,400 at the time of printing), which by inverse correlation, has been putting downward pressure on the USD.  This morning's Advance Retail Sales (1.4% in Oct. vs. -2.3% prior) gave a much-needed boost to market sentiment for an ameliorating US economy, though the USD continues to remain under pressure as risk appetite increases and interest rates remain at historic lows.  The Empire Manufacturing Index release earlier this morning, furthermore, serves as an ominous reminder that the ailing US manufacturing sector, together with persistent US joblessness, may ultimately prove to be a drag on any sustainable long-term economic growth.  Markets will have plenty to digest later in the week as a battery of key inflation and housing data will take center stage.  Markets will also be attuned to Fed Chairman Bernanke's speech this morning about America's economic outlook to further get a sense for the direction of future monetary policy and the true economic state of the Union.