The single currency strengthened against the greenback on Friday as U.S. stocks wrapped up their best week since November, prompting investors to take on more risk and pared long positions on U.S. dollar. In late New York trading, the euro edged up 0.1 percent against the dollar to 1.2930 and posted a 1.9 percent gain for the week.
The Dow Jones industrial average rose 53 points of 0.75 percent and ended at 7,223 after Citigroup Chairman Richard Parsons said the bank did not need any more government aid. The Standard & Poor’s 500 index and the Nasdaq Composite index also closed higher, ended up 0.77 percent to 756 and 0.38 percent to 1,341 respectively.
In other currencies, sterling ended up 0.4 percent versus the dollar on Friday and last seen at around 1.4000 level while Australian dollar and New Zealand also traded higher against the greenback, up 0.62 percent to 0.6582 and 0.92 percent to 0.5251 in late New York trading.
Concerns of the Bank of Japan may intervene to weaken its currency after the Swiss National Bank sold fanc to combat Switzerland’s worst recession in three decades had pressured the Japanese yen. The U.S. dollar, euro, sterling and Australian dollar rose to as high as 98.67, 127.65, 138.35 and 64.98 versus the yen respectively.
On the data front, U.S. showed a narrower trade deficit in January, which shrank to $36.0 billion versus the previous month of –39.93 billion, its smallest since October 2002, while another report, University of Michigan survey, showed U.S. consumer sentiment improved unexpectedly in March from 56.3 to 56.6.
Other data due out in the upcoming week include eurozone HICP and U.S. Empire state manufacturing on Monday, U.K. DCLG house prices, U.S. PPI, building permits and Housing starts on Tuesday, BOJ rate decision, U.S. CPI data and FOMC rate decision (18:15GMT) on Wednesday, U.K. CBI industrial trend and Philadelphia Fed survey on Thursday, and German PPI and eurozone industrial production data on Friday.