Investing.com - The dollar rose to four-week highs against the euro on Friday after cautiously optimistic comments from outgoing Federal Reserve Chairman Ben Bernanke boosted the outlook for the U.S. economy.
The dollar strengthened after Bernanke said the U.S. economy should continue to improve in 2014, but reiterated that monetary policy will remain “highly accommodative” for as long as needed.
“The combination of financial healing, greater balance in the housing market, less fiscal restraint, and, of course, continued monetary policy accommodation bodes well for U.S. economic growth in coming quarters,” Bernanke said. “Despite this progress, the recovery clearly remains incomplete”.
The comments came after the Fed’s December decision to roll back its asset purchase program to USD75 billion a month from USD85 billion a month starting this month.
EUR/USD fell to 1.3583, the lowest level since December 5 and was last down 0.60% to 1.3589. For the week, the pair lost 1.59%.
The dollar also gained ground against the pound and the Swiss franc. GBP/USD hit lows of 1.6396 and was last down 0.21% to 1.6419, to end the week with losses of 0.45%.
USD/CHF touched highs of 0.9056, the strongest since December 4 and settled at 0.9052, 0.70% higher for the day and extending the week’s gains to 2.02%.
The dollar ended the session little changed against the yen on Friday. USD/JPY touched lows of 104.08 but erased losses to settle at 104.85, holding below the five year peaks of 105.43 struck on Thursday.
The euro was weaker against the yen, with EUR/JPY falling to lows of 141.97, the lowest since December 19. The pair was last down 0.55% to 142.48, extending the week’s losses to 1.66%.
Trading conditions remained thin following the New Year’s holiday, while a severe snowstorm in the northeastern U.S. also kept activity light.
Elsewhere, the New Zealand and Australian dollars pushed higher against the greenback on Friday.
NZD/USD rose to highs of 0.8316, the strongest since December 12 and was last up 1.06% to 0.8272. The kiwi was bolstered by speculation that the Reserve Bank may hike rates at this month’s meeting.
AUD/USD hit highs of 0.9004, and was last up 0.43% to 0.8948.
In the week ahead, the Fed is to publish the minutes of its December meeting on Wednesday, while the U.S. jobs report for December is scheduled to be released on Friday. Meanwhile, interest rate decisions by the European Central Bank and the Bank of England will also be in focus.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, January 6
Germany is to release preliminary data on consumer price inflation, which accounts for the majority of overall inflation.
The U.K. is to produce data on service sector activity, a leading indicator of economic health.
The U.S. is to publish data on factory orders, while the Institute of Supply Management is to release data on service sector activity.
Tuesday, January 7
Australia is to publish data on the trade balance, the difference in value between imports and exports.
Germany is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity, as well as data on the change in the number of people unemployed.
The euro zone is to produce preliminary data on consumer inflation.
The Swiss National Bank is to publish data on its foreign currency reserves. This data is closely scrutinized for indications of the size of the bank’s operations in currency markets.
Both the U.S. and Canada are to publish reports on the trade balance, while Canada is also to release a report on the Ivey PMI.
Wednesday, January 8
Germany is to release reports on the trade balance and factory orders. Meanwhile, the euro zone is to produce data on the unemployment rate and a separate report on retail sales.
The U.S. is to release the ADP report on private sector job creation, which leads the government’s nonfarm payrolls report by two days.
Later Wednesday, the Federal Reserve is to publish what will be the closely watched minutes of its latest policy meeting.
New Zealand is to publish data on building consents, a leading indicator of future construction activity.
Thursday, January 9
Australia is to publish data on building approvals, as well as a report on retail sales.
China is to publish data on consumer inflation.
The U.K. is to release data on the trade balance. Meanwhile, the BoE is to announce its benchmark interest rate.
Later in the day, the ECB is to announce its benchmark interest rate. The announcement is to be followed by a press conference with President Mario Draghi.
Germany is to publish data on industrial production.
Canada is to produce data on building permits and new house price inflation.
In the U.S., the Labor Department is to release its weekly report on initial jobless claims.
Friday, January 10
Switzerland is to publish data on consumer inflation.
The U.K. is to release a report on industrial and manufacturing production, a leading indicator of economic health.
Canada is to release data on the change in the number of people employed and the unemployment rate.
The U.S. is to round up the week with the closely watched government data on nonfarm payrolls and the unemployment rate.
The dollar strengthened after Bernanke said the U.S. economy should continue to improve in 2014, but reiterated that monetary policy will remain “highly accommodative” for as long as needed.
“The combination of financial healing, greater balance in the housing market, less fiscal restraint, and, of course, continued monetary policy accommodation bodes well for U.S. economic growth in coming quarters,” Bernanke said. “Despite this progress, the recovery clearly remains incomplete”.
The comments came after the Fed’s December decision to roll back its asset purchase program to USD75 billion a month from USD85 billion a month starting this month.
EUR/USD fell to 1.3583, the lowest level since December 5 and was last down 0.60% to 1.3589. For the week, the pair lost 1.59%.
The dollar also gained ground against the pound and the Swiss franc. GBP/USD hit lows of 1.6396 and was last down 0.21% to 1.6419, to end the week with losses of 0.45%.
USD/CHF touched highs of 0.9056, the strongest since December 4 and settled at 0.9052, 0.70% higher for the day and extending the week’s gains to 2.02%.
The dollar ended the session little changed against the yen on Friday. USD/JPY touched lows of 104.08 but erased losses to settle at 104.85, holding below the five year peaks of 105.43 struck on Thursday.
The euro was weaker against the yen, with EUR/JPY falling to lows of 141.97, the lowest since December 19. The pair was last down 0.55% to 142.48, extending the week’s losses to 1.66%.
Trading conditions remained thin following the New Year’s holiday, while a severe snowstorm in the northeastern U.S. also kept activity light.
Elsewhere, the New Zealand and Australian dollars pushed higher against the greenback on Friday.
NZD/USD rose to highs of 0.8316, the strongest since December 12 and was last up 1.06% to 0.8272. The kiwi was bolstered by speculation that the Reserve Bank may hike rates at this month’s meeting.
AUD/USD hit highs of 0.9004, and was last up 0.43% to 0.8948.
In the week ahead, the Fed is to publish the minutes of its December meeting on Wednesday, while the U.S. jobs report for December is scheduled to be released on Friday. Meanwhile, interest rate decisions by the European Central Bank and the Bank of England will also be in focus.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, January 6
Germany is to release preliminary data on consumer price inflation, which accounts for the majority of overall inflation.
The U.K. is to produce data on service sector activity, a leading indicator of economic health.
The U.S. is to publish data on factory orders, while the Institute of Supply Management is to release data on service sector activity.
Tuesday, January 7
Australia is to publish data on the trade balance, the difference in value between imports and exports.
Germany is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity, as well as data on the change in the number of people unemployed.
The euro zone is to produce preliminary data on consumer inflation.
The Swiss National Bank is to publish data on its foreign currency reserves. This data is closely scrutinized for indications of the size of the bank’s operations in currency markets.
Both the U.S. and Canada are to publish reports on the trade balance, while Canada is also to release a report on the Ivey PMI.
Wednesday, January 8
Germany is to release reports on the trade balance and factory orders. Meanwhile, the euro zone is to produce data on the unemployment rate and a separate report on retail sales.
The U.S. is to release the ADP report on private sector job creation, which leads the government’s nonfarm payrolls report by two days.
Later Wednesday, the Federal Reserve is to publish what will be the closely watched minutes of its latest policy meeting.
New Zealand is to publish data on building consents, a leading indicator of future construction activity.
Thursday, January 9
Australia is to publish data on building approvals, as well as a report on retail sales.
China is to publish data on consumer inflation.
The U.K. is to release data on the trade balance. Meanwhile, the BoE is to announce its benchmark interest rate.
Later in the day, the ECB is to announce its benchmark interest rate. The announcement is to be followed by a press conference with President Mario Draghi.
Germany is to publish data on industrial production.
Canada is to produce data on building permits and new house price inflation.
In the U.S., the Labor Department is to release its weekly report on initial jobless claims.
Friday, January 10
Switzerland is to publish data on consumer inflation.
The U.K. is to release a report on industrial and manufacturing production, a leading indicator of economic health.
Canada is to release data on the change in the number of people employed and the unemployment rate.
The U.S. is to round up the week with the closely watched government data on nonfarm payrolls and the unemployment rate.