Despite economic indicators coming largely in line with estimates, risk aversion dictated global market activity on Friday with the greenback and yen the prime beneficiaries. Global indices lost ground as investors suffered another bout of the jitters with key commodities following suit. Economic news from the States saw Consumer Price Index rose in line with economists' consensus 0.1 per cent for the month of December against a previous 0.4 per cent rise, representing an annual growth of 2.7 per cent. As predicted, US Industrial Production grew 0.6 per cent in the month of December.
The Reuters/Michigan Consumer Sentiment Index failed to achieve market expectations with the index recording 72.8 in December. Although this represents a moderate increase from the previous month - the latest result fell short of a recording of 74 expected.
The lull in risk appetite by default saw the higher yielding currencies turn south as investors preferred the perceived safety of the low yielding heavy weights, the US Dollar and Yen. Continuing on from Friday's domestic session, the Aussie dollar extended losses falling to lows of 92.15 US Cents and remains in the low 92's in early trade.
Locally, this morning TD Securities/ Melbourne Institute will release a monthly inflation report which may add further weight for a fourth consecutive interest rate hike. Expect Aussie dollar activity to reactive to this morning's inflation data, as traders hunt for clues on the impending rates decision when the RBA reconvenes in February. November's release saw the inflation gauge show 0.3 percent growth, representing an annual inflation rate of 2.1 percent.