The dollar trade higher against the yen on Friday

Good Morning,

- Asia trading was calm as key markets in the region such Australia, Hong Kong and Singapore closed on Friday.

- The dollar trade higher against the yen on Friday, with markets slowly getting into gear after the Christmas holiday.

- The euro trade in a narrow range near to $1.22 level, edging back towards a 28-month trough of $1.2165 reached on Tuesday in light of robust U.S. GDP data that further boosted prospects for the world's largest economy. U.S. economic data has provided evidence that the economy is steadily recovering, and heightened expectations that the FED is on track to eventually hike interest rates in 2015.

- The Aussie was slightly up at $0.8125, still within reach of a 4-1/2 year low of $0.8087 plumbed on Tuesday.

- Morgan Stanley on EUR/USD: EUR is the most extreme short-positioned currency in the G10, notes Morgan Stanley. "However, despite the latest readings of the MS FX Positioning Tracker showing there has been scaling back of EUR short positions, the EURUSD rebound has remained limited," MS adds. "In recent months, there have been a couple of examples of short EUR-position adjustment resulting in only limited correction rebounds. This we believe is evidence of the more structural outflows now developing from the Eurozone, keeping the EURUSD downtrend intact," MS argues. "The political uncertainty building within Europe is set to be a major theme over the coming year, we believe, where several elections are likely to highlight a shift away from mainstream parties towards smaller, often more EMU skeptical political parties, throughout Europe. This is likely to add to the longer-term EUR bearish theme, in our view," MS expects. We expect the EUR to come under continued pressure over the coming year and reiterate our view of EURUSD extended towards the 1.12 area. If the ECB does move to QE in the coming months, this would likely take us to our 1.12 target more rapidly and put the focus on our EUR bear case scenario, where we project EURUSD down to 1.05 for end-2015," MS adds.

- Japanese retail sales rose 0.4% in November from a year earlier, the government said Friday, a sign that household consumption may be starting to recover from a slump in the summer triggered by a sales tax increase in April.

- Japan’s inflation rate slowed for a fourth straight month, adding to central bank chief Haruhiko Kuroda’s challenges in reflecting the world’s third-biggest economy. Consumer prices excluding fresh food increased 2.7 percent in November from a year earlier. Stripped of the effect of April’s sales-tax increase, core inflation -- the Bank of Japan’s key measure -- was 0.7 percent.

- Oil traded temporally above $60 a barrel amid the highest volatility in more than three years as Saudi Arabia, the world’s largest crude exporter, is seen to be signaling its confidence in the market. Brent futures rose as much as 0.6 percent, climbing for the second time in three days. Saudi Arabia’s assumption of oil at $80 a barrel next year is sending a message that the government expects a price rebound.

- Russia said its currency crisis was over on Thursday but warned that inflation is set to climb above 10 percent, adding to the problems facing President Vladimir Putin's government as it fights its worst economic crisis since 1998.

- Russia’s international reserves plunged the most in six years, losing $15.7 billion last week as the government and central bank pledged measures to support banks and defend the currency. The value of the stockpile, which includes the central bank’s reserves and two sovereign wealth funds, fell to $398.9 billion in the week through Dec. 19, the Bank of Russia said.

Have a Weekend!