Risk aversion support the green back and the Japanese yen; kiwi falls to 6-yr lo

The dollar rose against the euro on Friday as deepening concerns over the global recession prompted investors to shed risky assets and seek the harbor of the world's most liquid currency. The euro took a hit on Thursday after billionaire investor George Soros told an Austrian newspaper the currency may not survive without a European Union plan to deal with toxic assets. A comment from European Central Bank President Jean-Claude Trichet that the ECB could push interest rates below 2 percent also kept the currency on the back foot.

The yen climbed across the board as a drop in stock markets sparked unwinding of carry trades, in which investors use low-yielding currencies such as the yen to fund purchases of assets and currencies with higher yields elsewhere.

The New Zealand dollar struck a six-year low against the U.S. dollar after Reserve Bank of New Zealand Governor Alan Bollard said there was room for more interest rate cuts. The New Zealand central bank cut interest rates on Thursday by an aggressive 150 basis points to a record low of 3.5 percent to boost an economy deep in recession.

Worries over a prolonged global economic slump increased as government data showed that Japan's industrial output plunged 9.6 percent in December; the biggest drop on record. The data came ahead of the U.S. government's first snapshot of the economy in the fourth quarter, which is expected to show it at its weakest in 26 years. U.S. gross domestic product, due at 1330 GMT, is forecast to show a 5.4 percent decline on an annualized basis, hit by plunging consumer spending as unemployment swelled.

We can see that bigger-than-expected negative U.S. growth will have a negative impact on the global economic growth. Today, investor’s main focus will be on the GDP data from U.S. and Canada at 13:30 GMT. America`s consumer confidence expected to show decline at 14:55 GMT.

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