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During early European deals on Friday, the US dollar climbed to a 2-day high against its European and Swiss counterparts. Meanwhile, the dollar recovered its Asian session's loss against the pound during this time. On the other hand, the dollar remained down against the yen today.
The US dollar, which closed yesterday's trading at 1.0824 against the Swiss franc rose to a 2-day high of 1.0105 during early deals on Friday. On the upside, 1.125 is seen as the next target level for the dollar-franc pair.
Swiss M3 money supply grew 1.6% year-on-year in November, the Swiss National Bank said today. This follows revised 2% increase in the preceding month. The central bank downwardly revised October's growth from 2.1%.
In early trading on Friday, the dollar jumped to a 2-day high of 1.4053 against the European currency. This may be compared to Thursday's New York session close of 1.4273. If the dollar moves up further, it may likely target the 1.385 level.
Germany's producer price inflation slowed more than expected in November as growth in the energy prices extended their declining trend, official data showed. According to the Federal Statistical Office, the index of producer prices for industrial products meant for domestic sales grew 5.3% year-on-year in November, after growing 7.8% in October. That was slower than the expected growth of 6.1%, while the growth eased for the second straight month.
French business confidence indicator dropped to 73 in December from revised 79 in November, the statistical office INSEE said. Economists had expected the index to drop to 78. Meanwhile, the November figure was revised from 80.
After a brief uptrend, the dollar declined against the yen in early trading on Friday. The pair moved from 89.85 to 88.44 by about 3:45 am ET. If the dollar-yen pair falls further, it may test support around the 87.2 level. The pair was worth 89.52 at Thursday's New York session close.
The Bank of Japan's Board of Governors voted to trim the overnight call rate by 20 basis points to 0.10 percent, the BOJ said on today at the conclusion of its two-day monetary policy meeting in Tokyo. The rate cut was approved by a vote of 7 to 1, with only board member Tadao Noda voting against the action.
In a statement accompanying the rate decision, the board cut its view of the Japanese economy, calling it "worsening," while adding that conditions will remain severe for a while and recovery is expected to take some time. The board also said it will pay close attention to the downside risks to the economy, but it will take whatever steps are necessary as a central bank.
Meanwhile, the Cabinet Office said that the Japanese government has downwardly revised its estimate for gross domestic product for the fiscal year ending March 2009. The government now forecasts the nation's economy to shrink 0.8 percent, down from its earlier estimate of 1.3 percent growth.
The dollar reversed direction against the pound after hitting a low of 1.5187 at 9:05 pm ET Thursday. The dollar climbed to 1.4979 by about 4:05 am ET Friday. The immediate resistance for the US currency is seen around the 1.489 level. The pound-dollar pair yesterday's trading at 1.5022.
The pound gained in Asian session today after a report showed that UK's consumer confidence unexpectedly improved in December. Market Research Company GfK NOP reported today that its headline index of consumer confidence registered a reading of minus-33 for December, compared to minus-35 in November. A majority of surveyed economists had forecast a decline to a reading of minus-39.
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