Dollar Gaining Ground Heading Into The Weekend

13:09, 17th August 2012

(RTTNews) - The dollar is climbing against all of its major competitors on Friday. The better than expected U.S. consumer confidence data reported this morning is partially responsible for the upward move.

The comments made by German Chancellor Angela Merkel were also in focus on Friday. Merkel stated that Germany is committed to do everything it can to maintain the euro, which helped keep alive hopes that the ECB will take some decisive steps to reduce surging borrowing costs.

Meanwhile, Finland is preparing measures to face any kind of eventuality in the face of a breakup of the euro currency-bloc, the country's Foreign Minister Erkki Tuomioja told the British newspaper The Daily Telegraph.

"We have to face openly the possibility of a euro-break up," Tuomioja was quoted as saying on Thursday. "Our officials, like everybody else and like every general staff, have some sort of operational plan for any eventuality," he told the daily.

The European Commission wants the European Central Bank to act as the supervisor for all major banks in the euro area, German business daily Handelsblatt reported Friday.

The Commission is expected to put forward a proposal in this regard in September. According to the plan, the respective national authorities will be supervising the day-to-day activities of the banks and the ECB will intervene whenever there is a "dangerous risk."

Spanish banks' bad loans reached the highest on record in June, the Bank of Spain reported Friday. Bad loans rose to 9.42 percent of total lending in June, compared to 8.95 percent in May. Non-performing loans increased EUR 8.4 billion in June, to EUR 164.4 billion.

The dollar bounced back from a 3-day low of $1.2381 versus the Euro Friday morning, to a high of $1.2288.

Eurozone current account surplus increased in June, data published by the European Central Bank showed Friday. The seasonally adjusted current account surplus rose to EUR 12.7 billion in June from EUR 10.3 billion in May and EUR 5.5 billion in April.

Eurozone's foreign trade surplus increased in June, the latest figures published by Eurostat showed Friday. The trade surplus rose to EUR 14.9 billion in June from EUR 7.1 billion in May. A year ago, the balance was in a surplus of EUR 0.2 billion.

German producer price inflation eased to its lowest level in more than two years in July amid a fall in production costs for electricity and intermediate goods, a report from the Federal Statistical Office showed Friday. Pipeline inflation eased to 0.9 percent from 1.6 percent in June. Economists had expected the rate to ease to 1.2 percent in July. The figure slowed for the fourth month in a row.

A leading indicator of the French economy decreased for the third consecutive month in June, hurt primarily by negative assessment of the employment situation and industrial new orders, data released by the Conference Board showed Friday. The leading economic index declined 0.3 percent sequentially to 113 in June, after falling by 0.2 percent each in the previous two months.

The greenback also rebounded from a 2-week low of $1.5744 versus the pound sterling to around $1.5700 on Friday.

Confidence among British households about their property prices continued to weaken in August, data from a survey by Knight Frank and Markit Economics showed Friday. The house price sentiment index (HPSI) dropped to 44.5 in August from 45.6 in July, indicating that households turned more pessimistic about their home prices.

Japan's government expects the nominal economic growth to exceed real expansion in fiscal 2013 for the first time since 1997 and also sees an end to deflation in the economy. In the latest set of forecasts, published by the Cabinet Office on Friday, the government projected real economic growth of 1.7 percent for the fiscal 2013, following an estimated expansion of 2.2 percent in the current year ending March 2013.

The buck has been climbing since the beginning of the trading week against the Japanese Yen. The recent surge has brought the U.S. currency from around the Y78.200 level, to over a one-month high of Y79.565 on Friday.

U.S. consumer confidence unexpectedly improved in August following increased jitters earlier this summer. The Thomson Reuters/University of Michigan preliminary August index of consumer sentiment increased to 73.6, from 72.3 the prior month. This was the highest level since May, defying market expectations for a reading of 72.2.