A decline in market participants due to Christmas holidays saw a choppy session in the US on Friday. Greenback movements were dictated by a volatile day in equity markets, heightened by quadruple witching, which occurs with the simultaneous expiration of stock index futures and options, as well as individual stock futures and options.
Midway through the US session saw the US Dollar rise to intra-week highs against major counterparts with the Sterling and Euro falling to lows of US$1.6052 and US$1.4260 respectively. Despite some positive economic feedback, UK and European stocks failed to take any convincing direction. Euro-Zone Trade Balance data surpassed expectations recording a surplus of EUR8.8 billion for the month of October from EUR0.9 billion in September. German Business investment survey beat analyst's expectation rising 94.7 for the month of December against a previous upwardly revised 93.9 - coincidently the German DAX outpaced other European indices finishing the day in the black.
A switch in sentiment on the back of stronger earnings in conjunction with stronger key commodity prices saw the Dollar retreat from peak strength. The US dollar index which measures the dollar's value relative to six major foreign currencies managed to stay in the black finishing the day at 77.85 up 0.1 per cent.
The Aussie dollar became a beneficiary of the stronger appetite for risk, finishing the week close to intra-day highs of 89.12 US cents with the assistance of broad based gains from key commodities. At the time of writing the Aussie has returned below 89 US Cents and we can expect movements to be dictated by what's set to be a bumper lead up to Christmas in the States as a host of economic feedback is released.
Tuesday will see the release US November Home Sales of the final revision of third-quarter Gross Domestic Product. The Bank of England and Bank of Japan will release the minutes from the December meeting on Wednesday in addition to Canadian Gross Domestic Product.