The Australian dollar remained under pressure during the day, continuing the run of losses this week. There were further warning over possible intervention and an overvalued currency from the Reserve Bank with AUD/USD retreating to 10-week lows near 0.9150. USD/CAD pushed to highs near 1.0560 before losing some ground after mixed Canadian economic data releases.
The yen remained under pressure in Asian trading on Friday with expectations of an aggressive Bank of Japan monetary policy continuing to have a negative impact. There was also further interest in the yen as a funding currency with fresh support for carry trades. USD/JPY moved to highs around 101.35 before hitting profit taking.
The Euro maintained a form tone in early Europe, building on gains seen in New York yesterday. The German IFO business confidence index was stronger than expected with an increase to 109.3 for November from 107.4 the previous month. This was the highest reading since the first quarter of 2012 and the data pushed EUR/USD above the 1.35 level. Movements on the crosses had a significant overall impact with traders looking to push EUR/JPY above the 137.0 resistance area and this also dragged EUR/USD higher.
ECB officials remained cautious over the economic outlook, but also looked to play-down the deflation risks and there was no major Euro impact following the whipsaw action seen over the past few days.
The latest JOLTS job-openings data from the US was stronger than expected at 3.91mn for September from a revised 3.84mn previously which again kept the possibility of a December tapering in play, especially as this is a closely-watched indicator within the Federal Reserve. Regional Fed President Lockhart was slightly more optimistic surrounding the economy and stated that a tapering should be considered in December while remaining cautious.
As trading wound down for the week and position adjustment had a greater impact, EUR/USD managed to hold above 1.35 while there was a limited correction weaker for USD/JPY.
The Swiss franc continued to gain support from expectations of aggressive monetary easing elsewhere as USD/CHF dipped below 0.91 and EUR/CHF lost the 1.23 level. Sterling was also another net beneficiary of vulnerability elsewhere as GBP/USD probed resistance levels above 1.6200.