The euro remains near 6½ -month lows against the dollar

U.S. GDP data released today surprised markets to the upside, growing 5.7% in Q4, the fastest pace in almost 6 years, boosting optimism about a recovery from recession. This news has enabled the U.S. dollar to extend gains versus the yen to trade at a one-week high.
The U.S. Senate on Thursday backed Ben Bernanke for a second four-year term running the Federal Reserve, but by the stiffest opposition to any nominee for Fed chairman in the nearly 32 years the Senate has voted on the position.

The euro remains near 6½ -month lows against the dollar, loosing nearly 7% since December against the USD, hurt by concerns about the fiscal health of Greece and other peripheral euro zone countries.
EU Monetary Affairs Commissioner Joaquin Almunia said that an EU bailout for Greece was not possible, sparking a widening in the premium that investors demand to hold 10-year Greek government bonds rather than benchmark German bunds.
Financial markets are concerned that Athens will not be able to service its heavy debt, putting pressure on the euro currency and even raising speculation as to whether Greece could be forced out of the euro zone.

The broadly stronger USD had a dampening effect on the Sterling, though it remained buoyed against an underperforming euro.

The Japanese yen weakened slightly against the dollar as investors returned to riskier investments following Obama’s State of the Union speech.

As appetite for risk returns to the forefront, the Canadian dollar edged higher against the U.S. dollar, well supported by today’s data release showing Canada's economy grew 0.4% in November from October.

The Australian and New Zealand dollars neared 1-month lows against the USD and the AUD is off significantly from last week’s high of .9263. Investor’s see-sawing option of risk and downbeat mood is weighing on the currency. The Aussie lost nearly 4% in January.
Markets will focus next week on the Reserve Bank of Australia's (RBA) policy decision on Tuesday. A 25-basis-point rate hike is widely expected as the RBA reins in stimulus on the back of rising inflation.