The greenback fell against the yen and euro on Friday as investors continued to move out of risky assets, unnerved by U.S. President Barack Obama's proposals on Thursday to limit proprietary trading activities by U.S. banks and financial institutions.
The yen went though a very hectic and choppy session in Australia & Tokyo morning following Thursday's selloff in the Dow. Usd/yen resumed previous seesion's decline in Australia due to stoploss selling in eur/jpy when this cross pair dropped to a 9-month low of 126.55 after briefly penetrating key sup at 126.95 on stoploss selling, yen gained to a 4-week high of 89.78 vs the dollar in Asian morning session before rebounding on short-covering, the pair later rose to 90.58 in Europe. However, weakness in European & U.S. stocks markets (DJI closed down 217 points) triggered another wave of dollar selling (yen buying), forcing the dollar to retreat to around 90.80 in NY afternoon. The pair ended the day down over 0.5% and posted a third straight weekly decline.
Euro traded with a biddish tone in Asian session on Friday as pre-weekend short-covering hasd lifted price from intra-day low of 1.4065 (Australia). The single currency picked up more upward momentum after eurozone released its industrial production. Eurozone industrial new orders rose by 1.6% in November, much higher than economists' forecast of 0.5% increase n the upwardly revised 1.9% decrease in October. Euro later reached to intra-day high of 1.4182 in NY afternoon before retreating.
Despite rising to 1.6285 in European morning, cable tumbled from there and the decline accelerated after the U.K.’s retail sales grew less than market's forecast in December. U.K's December retail sales rose 0.3 % from November, below the 1.1% gain forecast by economists. The intra-day unwinding of euro/sterling which had fallen to a 5-month low of 0.8650 on Wednesday exacerbated sterling's decline, price eventually tumbled to as low as 1.6077 in NY mid-day session before staging a minor recovery.
Data to be released next week include Australia PPI, Germany Gfk index, U.S. existing home sales on Monday, Japan BOJ rate decision, Germany Ifo index, EU current account, U.K. GDP, U.S. consumer confidence on Tuesday, Australia Westpac leading economic index, Japan trade balance, Australia CPI, Japan BOJ report, U.K. CBI distribution trade, U.S. new home sales, U.S. Fed rate decision on Wednesday, New Zealand RBNZ rate decision, Japan retail sales, Germany unemployment rate, U.S. durable goods, jobless claims on Thursday, New Zealand trade balance, Japan manufacturing PMI, National CPI, unemployment rate, household spending, industrial production, housing starts, construction orders, U.K. Gfk survey, EU HICP flash, Unemployment rate, Swiss KOF indicator, U.S. building permits, PCE core, GDP, Chicago PMI, U. Michigan survey, Canada GDP, PPI on Friday.