The dollar is on track for its 11th successive weekly rise

Good Morning,

- The dollar is on track for its 11th successive weekly rise, something it has not achieved in four decades…

- The dollar trade steadied on Friday morning as keeps the recent gains near to multi-year highs. The dollar index, last trade at 85.278, after it rose to a four-year high of 85.485 on Thursday.

- Asian shares all in red on Friday after a sharp drop on Wall Street, as Apple broke under key technical levels after the tech giant withdrew an update to its new operating system. That pushed the S&P to its biggest one-day decline since July.

- The mood of German consumers worsened for the second consecutive month in September. The consumer climate once again suffered a setback. Following a value of 8.6 points in September, the overall indicator is forecasting 8.3 points for October. Economic and income expectations as well as willingness to buy all declined at virtually the same rate. The continued tension with regard to the geopolitical situation, which consumers now see as also posing a threat to developments in Germany, has caused optimism to dwindle further in September.

- The yield premium U.S. Treasuries offer over German Bunds stood near 15-year highs on Thursday as markets weighed the prospects of U.S. interest rate hikes against the chance of more monetary stimulus in the euro zone.

- Bank of America on US dollar: While the USD is undergoing a short-term pullback following the EUR/USD test and hold of the 1.2787/1.2694 support band, USs weakness must be seen as corrective and temporary, advises Bank of America Merrill Lynch. "Indeed, the bigger picture view for the USD Index is clearly bullish, with upside targets seen to the 89.62/91.40 area. USD pullbacks should be bought," BofA adds. Reflecting that in GBP/USD, BofA thinks that the larger trend remains lower for 1.5722 and eventually beyond. "In the near term, gains must be seen as corrective. Ideally, bounces should be limited to the 1.6355/53 area, but a bounce could extend back toward the 1.6417 high of Sep-23 without damaging the larger bear trend," BofA projects. In line with this view, BofA holds a short GBP/USD position from 1.6376 targeting 1.6052.

- Fed's Fisher: The FED may start raising rates around the spring of 2015, at the earlier end of market expectations. "It's assumed in the market place that we'll start our liftoff in raising interest rates sometime between the spring and the summer,… I won't say what we're saying internally, that would not be appropriate, but maybe sooner rather than later,"

- Atlanta FED’s President Dennis Lockhart said on Thursday that the Fed's main policy statement will almost certainly shift in October as its bond-buying program winds down. The current statement says the Fed will wait "a considerable time" after the end of its bond-buying program before raising interest rates. The end of the bond-buying program means that phrase will have to change, Lockhart said.

- The dollar recovers against the yen on Friday after Japan's welfare minister said reforms for the country's giant pension fund would continue as planned. Reform of the fund is expected to result in more investment being channeled into Japanese equities and overseas assets, and reports of a possible delay had given the yen a bullish nudge, until the minister spoke out.

- Japan's core consumer price index (excluding perishables but including energy) came in slightly weaker than expected, up +3.1% on year in August as the sluggish global demand for energy led to softer gasoline prices and consumption remains weak after the April sales tax hike. The 3.1% rise was the 15th straight year-on-year gain but it was the lowest since +1.3% in March.

- The New Zealand dollar drops at one-year lows at $0.7889, as still smarting from the central bank chief's tough talk on Wednesday pointing out that the exchange rate is unsustainable and at unjustified levels.

Have a nice Weekend !