The US dollar was flat on Friday following yesterday’s partial rebound from recent lows. The greenback briefly topped 122 yen before slipping down to 121.91 yen in late Asian session. Risk aversion has helped the Japanese currency make gains against the dollar and is set to end the week 1% higher.
Meanwhile, the euro was steady against the dollar and the pound at 1.0945 and 0.7228 respectively. The single currency’s recent bullishness lost some steam on Thursday after ECB Governing Council member Erkki Liikanen said the ECB must continue its very accommodative monetary policy and that its asset purchase program may go beyond the end of March 2017.
The pound’s plunge on Thursday following dovish minutes from the Bank of England’s latest monetary policy meeting was short-lived and sterling quickly bounced back. The Bank of England said that despite a boost to growth from smaller government spending cuts, the ongoing weakness in oil prices and a leveling off in wage growth would keep inflation below 1% until at least the second half of 2016. The pound was up slightly at 1.5151 dollars in late Asian session.
Oil prices were steady on Friday after two days of losses. The supply glut showed no signs of abating as production in November rose to its highest since 2008. US oil futures were last trading at $36.35.
This put commodity-driven currencies under renewed pressure and the Canadian dollar touched a new 11-year low today. The greenback peaked at 1.3658 against the loonie in early Asian session before later easing to 1.3640.
The South African rand was also near lows today after dropping to a new record low on Thursday after the country’s finance minister was sacked. It was slightly firmer today at 15.39 against the dollar.
Looking ahead to the rest of the day, it will be fairly quiet in European trading with no major data releases expected. However, US retail sales data as well as the University of Michigan preliminary confidence survey for December should attract some attention in US trading.