The greenback tumbled sharply following a disappointing report on December retail sales, pushing the dollar lower against the Aussie to 0.9328 and the Canadian dollar to 1.0225. The December retail sales report missed expectations for an increase of 0.5%, instead declining by 0.3% versus an upwardly revised November reading of 1.8%. The excluding automobiles retail sales figure fell by 0.2% from a 1.9% reading previously. Weekly jobless claims edged up to 444k versus 433k in the previous week.

Economic reports slated for release on Friday include December CPI, Empire manufacturing survey, industrial production, capacity utilization and the University of Michigan consumer confidence survey.

ECB Leaves Rates on Hold

The European Central Bank, as expected, left interest rates unchanged at 1.0% when it announced its monetary policy decision earlier today. In the accompanying press conference by ECB President Trichet, he said current interest rate levels were appropriate and expressed his outlook that the Eurozone economy will grow at a moderate rate this year while inflationary pressures are expected to remain subdued.

Also released from the Eurozone overnight was November Eurozone industrial production and German consumer price index. The November Eurozone industrial production increased by 1% on a monthly basis compared with a revised 0.3% decline from October. On an annualized basis, the November Eurozone industrial production declined by 7.1% versus an upwardly revised -10.9% in the previous year. Meanwhile, the December German CPI edged up by more than anticipated to 0.8% from 0.7% in the previous month while edging up to 0.9% compared with 0.8%.

EURUSD holds steady just near the 1.45-level with support seen at 1.4460, followed by 1.4430 and 1.44. Subsequent support is eyed at 1.4370, backed by 1.4340 and 1.43. On the topside, resistance will emerge at 1.4520, followed by 1.4560 and 1.46. Additional ceilings are seen at 1.4640, followed by 1.4675 and 1.47.