The dollar was firmer as strong U.S. data prompted market participants to bring forward their expectations for the first rate hike. In this environment, the two-year U.S. yield, which has already hit a level that was not seen in almost four years, still has scope to increase further. So the buy-the-dollar trend is expected to spill over into the New Year; the prospect of further easing in Japan and the euro-zone reinforces this view.EUR/USD traded in the slim range of 1.2221-1.2209, as thin liquidity amid holidays made the pair subdued. The pair will likely remain choppy as European markets will remain closed today. USD/JPY touched 120.42 in early Asia trading but later dropped to 120.14. Data out of Japan showed that CPI has further slowed in November, increasing pressure on the BOJ to ease policy further.Both AUD/USD and NZD/USD continued to trade in tight ranges. Financial markets in Australia and New Zealand remained closed on Friday.
The material has been provided by InstaForex Company – www.instaforex.com