Previous session overview
The euro was clawing back some of its losses against the dollar following a surge in the greenback during U.S. trade as demand for risk waned amid lingering global credit concerns and continued reaction to the Federal Reserve's optimistic view on the U.S. economy.
The single currency was at USD1.4390 from USD1.4352 in late New York trade on Thursday. Against the yen, the euro was at JPY128.88 from JPY129.14 in New York, after earlier touching JPY128.78, its lowest level since Nov. 27.
Meanwhile, the dollar fell versus the yen on profit-taking, despite signs that the Bank of Japan may continue with its quantitative easing policy to tackle deflation. Elsewhere, the Swiss franc gained broadly amid rumors of a coup in Pakistan, which were later denied by a Pakistani government spokesman.
Against the yen, the U.S. currency fell to around JPY88.90 compared with JPY90.00 in New York late Thursday, before recovering to around JPY89.50.
Speculators sold the U.S. unit to lock in gains, despite the BOJ policy board leaving its key interest rate unchanged at 0.1% and saying in a statement that it would not tolerate year to year falls in the consumer price index.
The Australian dollar fell to a fresh 10-week low Friday before recovering lost ground to end little changed. The session was driven by technical factors and thinning volumes ahead of the Christmas holiday period, traders said.
Market expectation
European stocks are expected to open flat Friday on weak leads from the U.S. and Asia and as traders pull back from riskier plays ahead of the Christmas break.
Foe EURUSD support remains in place ahead of USD1.4300, a break to open a deeper move toward USD1.4285/80 ahead of USD1.4255/50. Resistance seen placed at USD1.4410/20. Germany Ifo data at 0900GMT this morning's highlight.
There may have been some hesitancy to sell USDJPY ahead of the BOJ meeting, in case they announced measures such as an increase in Rinban (outright Japanese government bond buying) operations which would have had a negative effect on the JPY, said analysts.
For Pound the support level held and has since allowed rate to recover again, currently trading around USD1.6185. Resistance now seen placed toward USD1.6190 (USD1.6188 61.8% USD1.6220/1.6136) ahead of USD1.6200 (76.4%) and USD1.6220.
Most important events of the day
| 18-Dec | Count. | Event | For | Unit | Imp. | Act. | Cons. | Prev. |
| 0:00 | JP | BoJ MPC interest rate decision | Low | |||||
| 0:00 | JP | BoJ Outlook Report | % y/y | Low | ||||
| 0:00 | GB | BoE release Financial stability report | Low | |||||
| 0:00 | AU | Australia and New Zealand Banking Group annual meeting | Low | |||||
| 0:01 | GB | Gfk Consumer Confidence | Dec | Index | Low | -17 | ||
| 7:00 | DE | PPI | Nov | % m/m | Med | 0.2 | ||
| 7:00 | DE | PPI | Nov | % y/y | Med | -5.9 | -7.6 | |
| 7:30 | FR | BoF Business Confidence | Dec | index | Low | 95 | ||
| 7:45 | FR | INSEE Business Confidence | Dec | index | High | 90 | 89 | |
| 7:45 | FR | INSEE Production Outlook Indicator | Dec | index | Low | -7 | -9 | |
| 8:10 | AT | PPI | Oct | % m/m | Low | -2.4 | ||
| 8:10 | AT | PPI | Oct | % y/y | Low | 0.8 | ||
| 8:30 | NL | Consumer Confidence | Dec | index | Low | -12 | -14 | |
| 9:00 | DE | IFO Business Climate | Dec | Index | High | 94.5 | 93.9 | |
| 9:00 | DE | IFO Current Conditions | Dec | Index | High | 90 | 89.1 | |
| 9:00 | DE | IFO Expectations | Dec | Index | High | 99 | 98.9 | |
| 9:00 | EU | Current account (nsa) | Oct | EUR bn | High | -5 | ||
| 9:00 | EU | Current account (sa) | Oct | EUR bn | High | -5.4 | ||
| 9:00 | IT | Industrial Orders (nsa) | Oct | % y/y | Low | -17 | -20.4 | |
| 9:00 | IT | Industrial Orders (sa) | Oct | % m/m | Low | 0.5 | 5.2 | |
| 9:30 | GB | M4 Money Supply (P) | Nov | % m/m | Low | 0.6 | 1.6 | |
| 9:30 | GB | M4 Money Supply (P) | Nov | % y/y | Low | 10 | 10.8 | |
| 9:30 | GB | Public Finances (PSNCR) | Nov | GBP bn | Low | 17.3 | 5.9 | |
| 9:30 | GB | Total Business Investment (F) | Q3 | % q/q | Med | -3 | -3 | |
| 9:30 | GB | Total Business Investment (F) | Q3 | % y/y | Med | -21.7 | -21.7 | |
| 10:00 | EU | Trade balance (sa) | Oct | EUR bn | High | 5.7 | 6.8 | |
| 10:00 | EU | Trade balance (nsa) | Oct | EUR bn | High | 5.8 | 3.7 | |
| 10:00 | EU | ECB Vice President Papademos presents Financial Stability Review | Low | |||||
| 13:30 | CA | Wholesale Sales | Oct | % m/m | Low | 0.5 | 0.2 | |
| 14:00 | BE | BNB Consumer Confidence | Dec | Index | Low | -10 |
