The greenback rose against the Japanese yen to a two-month high of 114.21 on reduced concern that credit losses will weaken global economic growth together with the rally in global stock markets. Euro, aussie, sterling rallied versus the yen from 162.00 to 164.05, from 97.09 to 99.06 and from 224.32 to 226.46 respectively.
The dollar moved higher against major currencies after the release of U.S. personal spending which jumped by 1.1% in November versus the forecast of 0.7% from upwardly revised 0.4% in October. University of Michigan also outpaced the market at 75.5 (forecast was 74.9). U.S. stocks rose sharply due to the better-than-expected U.S. economic data, strong earnings from Research in Motion boosting the technology sector and news of an overseas investment in brokerage giant Merrill Lynch supporting financial shares.
The British pound rebounded briefly to 1.9895 after the release of better-than-expected U.K. retail sales data which rose by 0.4% in November versus the forecast of a rise of 0.2% and then weakened again to 1.9810 due to active cross selling in sterling especially versus the euro (eur/gbp rallied to four-year high of 0.7257) on the disappointing U.K. Gfk survey.
High-yielding currencies, including Australian dollar, New Zealand dollar strengthened against U.S. currency from 0.8580 to 0.8698, from 0.7600 to 0.7680 respectively. The greenback weakened versus Canadian dollar form 1.0011 to 0.9911.
There are little important economic data to be released next week and thin market volume is expected as Japan and Germany will be closed for holiday on Monday and most of the major markets, including Germany, United Kingdom and U.S. were closed for Christmas holiday. New week will see the release of Japan’s CSPI on Tuesday; the Bank of Japan minutes on Wednesday; U.s. durable goods, jobless claims and closely watched consumer confidence on Thursday; Japan’s Tokyo CPI, retail sales and industrial production, U.K. Nationwide house prices, U.S. Chicago PMI and new home sales.