Dollar ends mixed afrer volatile trading as fall in US stocks dampens risk appetite

The greenback pared intra-day gains made in Asia and European morning and ended largely mixed on Friday. The single currency rose broadly in European morning after news reported that its unlikely that the European Central Bank will cut its interest rates. The Japanese yen was the weakest currency versus the usd dollar and climbed to a 7-month high of 104.94. Decline in U.S. stocks with the Dow shedding 620 points or down 2.03% at 29,982 dampened risk appetite.  
  
Reuters reported U.S. consumer spending fell for a second straight month in December amid renewed business restrictions to slow the spread of COVID-19 and a temporary expiration of government-funded benefits for millions of unemployed Americans.     Consumer spending, which accounts for more than two-thirds of U.S. economic activity, slipped 0.2% last month after dropping 0.7% in November. Economists polled by Reuters had forecast consumer spending decreasing 0.4% in December.   
  
Versus the Japanese yen, although dollar extended its recent ascent and gained to 104.57 in Asian morning, then rallied to a near 2-1/2 month high at 104.94 in Europe on usd's strength as well as cross-selling in jpy, the pair then retreated to 104.62 on profit-taking and then moved sideways in subdued New York session, price last traded at 104.68 near the close.  
  
Although the single currency retreated to 1.2094 in Asia, the pair then rose broadly versus usd, yen, sterling and chf on news that the ECB is unlikely to cut its interest rates and later hit session highs of 1.2155 in New York before retreating to 1.2125 on profit-taking.  
  
Reuters reported the European Central Bank is unlikely to cut its already-record low policy rate as this would do little to revive the pandemic-hit euro zone economy, five sources told Reuters, playing down concerns about a strong euro.     The sources said Knot had raised the rate cut issue at the ECB's policy meeting last week but the discussion was "marginal" and not considered part of the ECB's policy strategy, which is now focused on bond purchases and cheap loans to banks.   
  
The British pound went through another volatile session. Although cable fell from 1.3735 in Australia to session lows of 1.3657 in Europe on safe-haven usd buying, cable erased intra-day losses and rallied to 1.3751 in New York morning on cross-buying in sterling but only to retreat again to 1.3693 on profit-taking.  
  
Data to be released this week :  
  
Australia AIG manufacturing index, ANZ job advertisements, Japan Jibun Bank manufacturing PMI, China Caixin manufacturing PMI, Germany retail sales, Markit manufacturing PMI Swiss retail sales, manufacturing PMI, France budget Markit manufacturing PMI, Italy Markit manufacturing PMI, unemployment rate, EU Markit manufacturing PMI, unemployment rate, UK Markit manufacturing PMI, Canada Markit manufacturing PMI, and U.S. labor costs, productivity, Markit manufacturing PMI, construction spending, ISM manufacturing PMI on Monday.  
  
Australia RBA interest rate decision, UK nationwide house price, France CPI (EU norm), CPI, Italy GDP, EU GDP, New Zealand GDT price index, and U.S. redbook, ISM New York index on Tuesday.  
  
Australia AIG construction index, building permits, New Zealand unemployment rate, employment change, labour cost, Japan services PMI, China Caixin services PMI, Italy Markit services PMI, CPI, CPI (EU norm), France Markit services PMI, Germany Markit services PMI, EU Markit services PMI, HICP, core HICP, producer price index, and U.S. MBA mortgage applications, ADP employment change, Markit services PMI, ISM non-manufacturing PMI on Wednesday.  
  
New Zealand building permits, Australia trade balance, imports, exports, Swiss consumer confidence, UK Markit construction PMI, BoE interest rate decision, BoE asset purchase programme, BoE QE total, BoE QE corporate bond purchases, BoE MPC vote hike, BoE MPC vote unchanged, BoE MPC vote cut, and U.S. initial jobless claims, continued jobless claims, labor costs, productivity, durables ex-defense, durable goods, factory orders, durables ex-transportation on Thursday.  
  
Australia AIG services index, retail sales, Japan all household spending, coincident index, leading indicator, Germany industrial orders, France current account, non-farm payrolls, trade balance, imports, exports, UK Halifax house price, Italy retail sales, U.S. non-farm payrolls, private payrolls, unemployment rate, average earnings, trade balance, and Canada employment change, unemployment rate, trade balance, exports, imports, Ivey PMI on Friday.