The greenback fell against the Japanese yen from 100.40 to 99.10 on sagging U.S. stocks as investors worried that the credit crisis that has fractured the U.S. financial sector was far from over. However, trading is relatively thin on Friday as investors are waiting for Federal Reserve Chairman Ben Bernanke's testimony before Congress and March's non-farm payrolls report next week.
The British pound declined from 2.0090 to 1.9881 on Friday as March consumer confidence slumped to a 15-year low and U.K. Nationwide house price fell by 0.6% in March (forecast was a decrease of 0.3%) although U.K. current account came in better-than-expected. The single currency rallied to a record high of 79.29 against sterling.
European Central Bank council member Axel Weber said the bank ‘will act’ if its price-stability goal is threatened, adding speculation that ECB would raise current benchmark rate of 4% if inflation accelerated. German consumer price inflation unexpectedly accelerated in March also gave support to the euro. The single currency rose from 1.5741 to 1.5840 on Friday, however, euro tumbled versus the Japanese yen from 158.35 to 156.56 on active cross-unwinding.
Next week will see the release of Japan’s manufacturing PMI, industrial production, eurozone business climate, economic sentiment and U.S. Chicago PMI on Monday; Japan’s tankan report, German retail sales, unemployment rate and PMI manufacturing, eurozone and U.K. PMI manufacturing respectively and U.S. ISM manufacturing and construction spending on Tuesday; U.K. PMI construction, eurozone PPI, U.S. ADP employment, factory orders and revised durable goods on Wednesday; German, eurozone and U.K. PMI service respectively, eurozone retail sales, U.S. jobless claims and ISM non-manufacturing on Thursday; German factory orders, U.S. unemployment rate, average hourly earnings and closely watched non-farm payrolls on Friday.