The greenback fell broadly on Friday as speculation the global economic recovery encouraged investors to buy higher-yielding assets. The single currency, British pound, New Zealand dollar and Australian dollar rose against the dollar and touched session highs of 1.4939, 1.6707, 0.7444 and 0.9344 respectively in New York before easing on profit-taking. The dollar also weakened versus the Japanese yen as Japan’s economy probably expanded at the fastest pace in more than a year in the third quarter (forecasted to grow 2.9 percent) and usd/jpy touched 89.46 in New York trading before stabilising , near a month's low of 89.18 made on Nov 1.
U.S. stock markets rose on Friday as robust commentary from some retailers reinforced hopes an uptick in consumer spending in the holiday session, even as an early November gauge of consumer confidence fell. Dow Jones industrial average index ended the day up by 73 points to 10,270, while S&P 500 and Nasdaq Composed Index gained 6 points to 1,093 and 18 points to 2,167 respectively.
The ICE U.S. dollar index, which measures the dollar's strength against a basket of six other major currencies, pressured by a surprise jump in the U.S. trade deficit and was last trading lower by 0.4 percent to 75.28 in late New York session. The U.S. trade deficit in September widened the most in a decade and posted a trade gap of 36.47 billion, larger than the economists' median forecast of 31.65 billion and 30.71 billion in August.
On the data front, GDP in eurozone rose 0.4 percent in third quarter compared to 0.2 drop in second quarter after governments stepped up stimulus measures and the European Central Bank injected billions of euros into markets to encourage lending, however, the University of Michigan preliminary index of consumer conference unexpectedly fell in November for the second consecutive month,decreased to 66 from 70.6 in October, as surging U.S. unemployment shook households.
Data to be released next week include Japan GDP data, U.K. Rightmove house prices, eurozone HICP final, U.S. Empire state manufacturing, retail sales and business inventories on Monday, Japan Tertiary industry index, Australia RBA's November Minutes, U.K. CPI and RPI, eurozone trade balance, U.S. PPI, foreign treasury buys, net LT TIC flows, capacity utilisation and NAHB housing market index on Tuesday, Australia Westpac leading economic index, Japan machine tools orders, eurozone current accounts, U.K. CBI distribution trade, Canada CPI, U.S. building permits, housing starts, CPI and real earnings on Wednesday, Japan All industry index and leading indicators, Switzerland trade balance, U.K. PSNCR and retail sales, Canada leading indicators and wholesale sales, U.S. jobless claims, leading indicators and Philadelphia Fed survey on Thursday, Japan BOJ rate decision, and German PPI on Friday.