The US dollar traded sharply higher vs. most major currencies as positive US economic data spurred investors to increase bets that the Federal Reserve will raise interest rates sooner than expected. Retail sales rose 1.3% in November, better than forecast at 0.6%. The University of Michigan consumer sentiment index rose to 73.4 in December, higher than forecast at 68.8. Data on business inventories also increased 0.2% in October from a revised 0.5% fall previously.
The euro weakened against the dollar on increased speculation that the credit ratings of more European nations will be lowered. Earlier in the week, Spain, Greece and Portugal all had their credit rating outlooks reduced to negative by one of the major credit rating agencies.
Sterling continued its decline against the dollar amid concerns that the UK budget deficit will keep growing as the government continues to spend to revive the economy.
The Japanese yen fell in trading as investors sold the safe-haven currency with more positive signs in the global economic recovery.
The Canadian dollar declined against the dollar as commodity prices continued to fall. Crude oil prices fell below $70 dollars per barrel for the first time in 2 months. Canada's new housing price index grew 0.3% in October, lower than forecast 0.4%.
The Australian and New Zealand dollars both fell slightly against the dollar. The currencies were helped from having further declines as China's factory output climbed 19.2% in November from a year earlier. China is Australia's largest trading partner.
10-Year Treasury Note Yield: 3.5536%
Dow Jones Industrial Average: 10,447.17 +41.34