The greenback rallied across the board on Friday as upbeat U.S. data boosted speculation that the Fed will hike key interest rate soon next year. U.S. retail sales data rose by 1.3% in November versus the expectation of 0.7% increase. Later, a separate University of Michigan survey which showed consumer sentiment/confidence in December also came in much better than expected at 73.4 compared to economists' forecast of 68, spurring market's expectations of a quarter-point rate hike by the Fed before June 2010. U.S. crude oil futures fell an eighth consecutive session and settled at $69.46 while spot gold price pummeled to a 4-week low of $1110.00 an ounce in New York morning due to dollar's strength in New York session.
Although euro traded sideways earlier in Asia, the single currency tumbled from an intra-day high of 1.4777 and extended the corrective decline from this year's 1.5145 high to a two month low of 1.4586 after the release of U.S. retail sales data and the consumer confidence survey. Cross selling in the euro versus sterling also weighed on the single currency as eur/gbp dropped sharply from 0.9070 to 0.8980 before recovering. Similar to euro, usd/chf also extended the corrective upmove from the recent low of 0.9910 (November 09') to as high as 1.0368 in New York morning before stabilising
Despite the Japanese yen's brief but sharp fall versus most of its counterparts in New York morning, profit taking selling later caused price to retreat from 89.81 to 89.02, eur/jpy dropped from 131.60 to 130.00, aud/jpy declined from 81.95 to 81.11 while gbp/jpy slipped from 145.64 to 144.60 in late New York afternoon.
Data to be released next week include Japan Tankan capex and Tankan big manufacturing data, capacity utilisation, industrial production, U.K. Rightmove house price, Switzerland combined PPI, eurozone employment data, industrial production, Canada capacity utilisation on Monday, Australia Reserve Bank's Board December Minutes, Switzerland industrial production, U.K. RICS house price index, DGLG house price (y/y), CPI, RPI, Canada leading indicators, U.S. foreign treasury buys, net LT TIC flows, capacity utilisation, industrial production, NAHB housing market index on Tuesday, Australia GDP, Westpac leading economic index, Japan machine tools orders, German and eurozone service and manufacturing PMI, U.K. ILO unemployment rate, claimant count, eurozone, HICP final, U.S. housing starts, building permits, CPI, current account, Fed rate decision on Wednesday, Japan leading indicators, German retail sales, Switzerland ZEW index, Canada CPI, U.S. jobless claims, leading indicators, Philadelphia Fed survey on Thursday, Japan BOJ rate decision, U.K. financial stability report, PSNCR, German PPI, eurozone current account and trade balance, Canada wholesales sales data on Friday.