Investing.com - The euro fell sharply against the dollar on Friday after European Central Bank President Mario Draghi gave the clearest signal yet that the bank may unveil fresh stimulus measures at its December meeting.
The ECB is ready to act quickly to boost inflation in the euro zone and can also change the level of its deposit rate to boost the impact of quantitative easing, Draghi said.
The comments came during a conference in Frankfurt and underlined the diverging monetary policy expectations between the Federal Reserve and the ECB.
EUR/USD was down 0.82% to 1.0645 in late trade, not far from Wednesday’s seven-month trough of 1.0616. The pair ended the week down 0.5%.
The euro was also weaker against the yen and the pound, with EUR/JPY at 130.76 late Friday, off 0.85% for the day, while EUR/GBP slid 0.13% to 0.7010.
The dollar was little changed against the yen late Friday, with USD/JPY at 122.82, but ended the week up 0.43%.
The greenback gained ground against the Swiss franc and the pound, with USD/CHF advancing 0.57% to 1.0185 and GBP/USD down 0.68% to 1.5186.
Demand for the dollar continued to be underpinned by expectations that he Federal Reserve is on track to raise interest rates next month.
New York Fed President William Dudley said Friday that there is a "strong case" for hiking rates at the central bank’s next meeting in December as long as economic data continues to remain solid.
Higher U.S. interest rates would make the dollar more attractive to yield-seeking investors.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.58% to 99.65 on Friday, re-approaching Wednesday’s peaks of 99.96, the strongest since April 14. The index ended the week up 0.52%.
The greenback turned lower earlier in the week as investors booked profits after a strong rally, before pushing higher again on Friday as investors re-entered dollar positions.
In the week ahead, U.S. markets will be closed Thursday for the Thanksgiving holiday and Friday will be a half day.
The euro zone is to release survey data on private sector activity on Monday, while both the U.S. and the U.K. are to publish revised data on third quarter growth later in the week.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, November 23
Markets in Japan are to remain closed for a national holiday.
The euro zone is to release survey data on manufacturing and service sector activity. Germany and France are also to release individual reports.
The U.S. is to release private sector data on existing home sales.
Tuesday, November 24
Switzerland is to publish data on the employment level.
In the euro zone, the Ifo Institute is to report on German business climate.
Reserve Bank of Australia Governor Glenn Stevens is to speak at an event in Sydney.
The U.S. is to release revised data on third quarter growth, as well as a report on the trade balance and data on consumer confidence.
Wednesday, November 25
The Bank of Japan is to publish the minutes of its latest monetary policy meeting, giving investors insight into how officials view the economy and their policy options.
The U.S. is release a string of reports, including data on durable goods orders, personal spending, new homes sales and consumer sentiment and a report on initial jobless claims, which is being released one day earlier than usual, because of the Thanksgiving holiday.
New Zealand is to produce data on the trade balance.
Thursday, November 26
Australia is to release a report on private capital spending.
Markets in the U.S. are to remain closed for the Thanksgiving holiday.
Friday, November 27
Japan is to produce figures on household spending, inflation and retail sales.
The U.K. is to release revised data on third quarter economic growth.
In the euro zone, Spain is to release preliminary data on consumer inflation.
Canada is to round up the week with data on raw material price inflation.