Dollar snaps losing streak and gains on profit-taking ahead of year-end

The greenback snapped its recent losing streak and ended the day higher against majority of its peers on Friday as investors booked profits ahead of year-end holidays together with concerns if lawmakers in U.S. can agree upon the Covid-19 relief package soon.    
Reuters reported the U.S. Congress looked increasingly unlikely on Friday to meet a deadline to agree on 900 billion usd in fresh COVID-19 aid and instead may pass a third stopgap spending bill to keep the government from shutting down at midnight.  
  
Versus the Japanese yen, dollar found renewed buying at 103.10 in Australia and gained to 103.48 in Asia and then rose to session highs at +103.59+ in early European morning. However, lack of follow-through buying triggered profit-taking and the pair retreated to 103.20 ahead of New York open due partly to cross-buying in jpy before rebounding to 103.47 in New York, price last traded at 103.31 neat the close.  
  
The single currency retreated to 1.2239 in Asia on profit-taking after rising to a fresh 2-1/2 year peak at 1.2273 near New York close on Thursday. However, the pair found renewed buying there and rebounded to 1.2268 ahead of New York open due partly to upbeat German data together with cross-buying of euro especially vs sterling before dropping to session lows of 1.2226 in New York morning on usd's strength.  
  
Reuters reported German business morale rose unexpectedly in December even as Europe's biggest economy went into a strict lockdown to contain a second wave of coronavirus infections, a survey showed on Friday.     The Ifo institute said its business climate index rose to 92.1 from an upwardly revised reading of 90.9 in November.  
  
The British pound met renewed selling at 1.3590 in Australia and dropped to 1.3520 in Asia on concerns if EU and UK will be able to agree on a Brexit deal. The pair then fell to 1.3489 in European morning on broad-based selling in sterling and then dropped to session lows of 1.3472 in New York morning on usd's strength.  
  
Reuters reported European Union Brexit negotiator Michel Barnier said on Friday that "just a few hours" remained for negotiations to reach a trade deal with Britain.     "It's the moment of truth. We have very little time remaining, just a few hours to work through these negotiations in a useful fashion if we want this agreement to enter into force on the first of January," he told the European Parliament in Brussels.     "There is a chance of getting an agreement but the path to such an agreement is very narrow."  
  
In other news, Reuters reported British Prime Minister Boris Johnson said on Friday trade talks with the European Union were "looking difficult" and there was a gap that needed to be bridged, but the door for further negotiations remained open.     "Obviously the UK's position is always that we want to keeping talking if there's any chance of a deal," Johnson told reporters.     "But we've also got to recognise that the UK's got to be able to control its own laws, it's what people voted for, and we've also got to be able to control our waters and fishing rights."  

Data to be released this week:  

New Zealand business outlook, business activity, Italy trade balance, UK CBI distributive trades, U.S. Chicago Fed National activity and EU consumer confidence on Monday.  
  
Australia retail sales, Germany consumer sentiment, UK GDP, current account, PSNB, PSNCR, Canada average weekly earnings, U.S. GDP, PCE, core PCE, redbook retail sales, existing homes sales and Richmond Fed manufacturing on Tuesday.  
  
Australia imports, exports, trade balance, Japan leading economic index, coincident index, France producer prices, Italy business confidence, consumer confidence, U.S. building permits, personal income, personal spending, PCE, core PCE, durable goods, initial jobless claims, continued jobless claims, monthly home price, new home sales and University of Michigan consumer sentiment on Wednesday.  
  
Australia market holiday, Germany market holiday and Canada building permits on Thursday.  
  
New Zealand market holiday, Australia market holiday, Japan CPI, unemployment rate, retail sales, construction orders, housing starts, Swiss market holiday, Italy market holiday, France market holiday, Germany market holiday, UK market holiday, U.S. market holiday and Canada market holiday on Friday.