Dollar falls on growth data, Fed language ..

The dollar slid against major currencies on Friday after Federal Reserve language and government economic growth data confirmed market sentiments that the economy will remain stuck in the doldrums for a long time to come.

The dollar slumped against the euro in mid-afternoon U.S. trading on Friday, with EUR/USD rising 0.78% and trading at 1.3212.

At a Federal Open Market Committee meeting on Wednesday, the Federal Reserve concluded that interest rates, currently at a very low 0.25%, will likely stay that way through 2014, longer than a forecast made towards the end of last year that loose policies will stick around until 2013.

On Friday, the Commerce Department reported that the economy grew 2.8% in the fourth quarter, when compared with the same period a year earlier.

The figure came in a little lower than market expectations.

Furthermore, a good portion of growth came from companies replenishing their inventories and not by purchasing capital goods, which would have indicated plans for future investments and even more growth down the road, thus watering down the value of the greenback.

Furthermore, hopes rekindled that Greece is close to reaching a deal with private creditors to restructure its debt, a requirement for Athens if it wants to draw down from aid packages in the future.

"The next market focus is whether Greece will get this next aid package and whether it will be able to stay in the euro," said Stephen Gallo, head of market analysis at Schneider Foreign Exchange in London, according to Bloomberg.

"The market senses the Fed is cautious, so the market is scrutinizing all the data coming out of the U.S., so prices are really reacting."

Meanwhile, the dollar was down against the pound, with Cable rising 0.19% to hit 1.5720.

The greenback was down 0.94% against the yen, with USD/JPY trading at 76.73, and down against the Swiss franc, with USD/CHF falling 0.78% to 0.9133.

The greenback was down against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.01% at 1.0017, AUD/USD up 0.14% at 1.0648 and NZD/USD up 0.19% at 0.8232.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.63% at 79.03.

Over the weekend, markets will look for signs of deal between Greece and its private creditors.

On Monday, markets will keep an eye on the U.S. Bureau of Economic Analysis, which will release figures on personal spending and income.

German inflation figures are tentatively due out, while German retail sales and Italian unemployment figures are set to publish as well.

In Japan, unemployment and industrial output figures will be released on Monday.

In the United Kingdom, Gfk Consumer Confidence numbers will hit the wire that day as well.

Euro stocks lower on bearish numbers; DAX off 0.67% ..

European stocks closed lower Monday on bearish declining German production numbers and uncertainty from the Merkel Sarkozy meeting in Berlin.  

After the close of European trade, the EURO STOXX 50 gave back 0.53%, France's CAC 40 fell 0.31%, while Germany's DAX 30 closed lower by 0.67%. Meanwhile, in the U.K. the FTSE 100 fell 0.66%.  

The selling was triggered by declining German production numbers. Production fell 0.6% from October, greater than the 0.5% economist's forecasted.  

German Chancellor Angela Merkel met with French President, Nicolas Sarkozy in Berlin to hash out new fiscal discipline rules for the euro zone's fiscal compact negotiated at a December 9th meeting. The leaders plan on having the new budget rules by January, 30th. One month ahead of schedule.  

Peter Oppenheimer of Goldman Sachs explained the situation to Bloomberg, "We believe that a combination of weaker earnings numbers, a further deterioration in euro zone growth in the first quarter, and further political tensions are likely to push equities down before they recover."  

Banks and pharmaceuticals led the stock market lower. Unicredit, Italy's largest lender plummeted 13% and had trading suspended twice due to volatility after share purchase rights plunged 57% from the end of last week. 

Pharmaceutical giant, Glaxo Smith Kline dropped 4.1% after stating that its new drug Relovair showed no statistical difference to Seretide. potentially limiting the drug's commercial success.  

Meanwhile, in bullish news, BMW advanced 2% on strong sales of Rolls Royce and Mini brands.  

Pest control company, Rentokill Initial added 3% on a Credit Suisse upgrade. 

U.S. stocks traded down across the board in midday trading with the Dow Jones Industrial Average slipping 0.03%, the S&P 500 giving back 0.17% and the Nasdaq 100 falling 0.18%.  

Investors are awaiting the French industrial production report Tuesday.

U.S. stocks dip as market shrugs off jobs report; Dow down 0.45% ..

U.S. stocks finished mixed to lower on Friday as investors brushed off stronger-than-expected jobs figures and sold their equities for profits.

The Dow Jones Industrial Average closed down 0.45%, while the S&P 500 index was down 0.25% and the Nasdaq Composite index finished up 0.31% on Friday.

In the U.S. on Friday, the Bureau of Labor Statistics reported that the economy added a net 200,000 nonfarm payrolls in December, better than forecasts for a 150,000 gain.

The news firmed the dollar, especially since German factory orders came in weaker than expected at -4.8% compared with a forecast for a 1.6% decline, although equities investors sold to take profits, pointing out that the jobs market is still far from stellar.

"It's definitely a solid report, but not a blowout surprise," Alan Gayle, a senior strategist at RidgeWorth Capital Management in Richmond, Virginia, which oversees about $44 billion, told Bloomberg.

"The drop in the unemployment rate is good news, but it may reflect sluggishness in the labor force growth and it suggests that from a policy perspective we still have a lot of work to do."

Leading losers included Alcoa, which fell 2.14%, Bank of America, down 2.06% and DuPont, down 1.31%

Leading gainers included Microsoft, up 1.54%, Walt Disney, up 1.04%, and McDonald's, up 0.77%.

European indices, meanwhile, were mixed.

France's CAC 40 fell 0.24%, Germany's DAX fell 0.62%, while Britain's FTSE 100 rose 0.45%.

On Monday, all eyes will focus on China, which will tentatively release its latest economic growth, inflation and trade balance figures.

Also on Monday, U.S. consumer credit figures will come out, while in Europe traders will keep an eye on Swiss unemployment rates and French consumer spending figures.

The U.K., meanwhile, will release manufacturing and industrial output figures while in Canada, housing starts and building permits will be released.

Crude oil futures advance on strong U.S. numbers ..

Crude oil futures moved toward a weekly gain in New York  Friday on strong U.S. economic numbers and Iranian supply worries.  

On the New York Mercantile Exchange, light sweet crude futures for February settlement traded at USD102.33 a barrel during early U.S. trade giving climbing 0.51%.  

It earlier hit a daily high of USD102.53 and a low of USD101.31 a barrel.  

Slight weakness in the U.S. dollar helped lift oil prices.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, gave back 0.17% to trade at 81.16.  

Dollar weakness generally lifts commodity prices, as it increases their appeal as an alternative asset and makes dollar priced commodities less expensive for holders of other currencies.  

A rally of strong U.S. economic data combined with Iranian supply worries helped fuel the bullish oil run.  

The latest positive U.S. numbers indicated payrolls advanced by 155,000 workers indicating growth in the world's largest economy. 

Meanwhile, the euro zone has agreed on principle to begin an oil embargo against Iran per a diplomat. However, the details of the potential embargo remain uncertain. This fear added support to recent crude oil prices.  

France came into danger of losing its AAA credit rating, yesterday,  after a bond auction disappointed investors adding to euro zone crisis concerns.  

Elsewhere, on the ICE Futures Exchange, Brent oil futures for February delivery traded higher by 0.12% to trade at USD112.88 a barrel, up USD10.58 on its U.S. Counterpart.  

This greater than USD10.00 spread is near historic highs. The two contracts traditionally trade within USD1.00 of each other.

U.S. dollar surges on safety flight .

The U.S. dollar advanced against its major counterparts on Wednesday, as euro zone debt crisis fears sent investors seeking the relative safety of the greenback.  

During mid session U.S. trade, the greenback traded higher against the euro, with EUR/USD falling 0.77% to 1.2949.  

The single currency was depressed by a triple whammy of Italian bank fears,  a monotonous German debt auction, and European Central Bank overnight deposits striking all time highs.  

The results of the German bond auctions were far from inspiring with an average yield of 1.93 compared with 1.98 in November.  

The U.S. dollar was up against the pound, with GBP/USD  falling 0.17% to hit 1.5622.  

In other news, official data showed that euro zone inflation dropped from 3% to 2.8% in December adding to rate cut euro bearishness.  

Meanwhile, A UK report indicated that construction activity surprisingly increased in December, extending the expansion to 12 months.  

The greenback was lower against the yen but sharply higher against the Swiss franc with USD/JPY off by 0.03 to 76.71 and USD/CHF soaring 1.04% to hit 0.942.  

In addition the greenback was higher against its Canadian,  Australian and New Zealand cousins with USD/CAD falling  0.27% to hit 1.0133, AUD/USD dropping 0.22% to hit 1.0355 and NZD/USD giving back 0.28% to 0.7870.  

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, climbed 0.58% to hit 80.42.  

Investors are anxiously awaiting renewed euro zone crisis talks starting on January, 9th as well as U.S. payroll numbers on January 6th.

Crude oil slumps as EU debt woes weigh, Iran fears support .

Crude oil futures declined on Wednesday, easing off the previous session’s seven-week high as market sentiment weakened amid lingering concerns over the euro zone’s debt crisis, while mounting fears over a disruption to Iranian oil supplies limited losses. 

On the New York Mercantile Exchange, light, sweet crude futures for delivery in February traded at USD102.59 a barrel during European morning trade, shedding 0.35%.
 
It earlier fell by as much as 0.48% to trade at a session low USD102.41 a barrel. Prices rallied to a seven-week high of USD103.16 a barrel on Tuesday.

Investors turned cautious as Germany’s Treasury was set to auction EUR5 billion of 10-year government bonds later in the day.

Adding to nervousness, data released earlier in the day showed that the use of the European Central Bank's overnight deposit facility reached a new all-time high of EUR453.1 billion on Tuesday.

The report underlined concerns over region’s banking sector, as euro zone lenders increasingly turn to the ECB as a safe-haven for extra funds.

Euro zone developments dominated trading in the oil market for the last several months of 2011, amid worries that the sovereign debt crisis could trigger a broader economic slowdown that would curb demand for oil.

Meanwhile, prices continued to draw support from supply disruption concerns as a result of escalating tensions between Iran and the West.

Iran’s military chief Ataollah Salehi warned the U.S. against sending naval ships back to the Persian Gulf, however Pentagon Spokesman George Little said earlier that "regularly scheduled movements" including through the Strait of Hormuz will continue, ignoring threats from Iran.
 
The Strait of Hormuz, located between Iran and Oman, is one of the most important oil-shipping channels in the world, handling about 33% of all ocean-borne traded oil, according to the U.S. Energy Information Administration.

Iran is the world's fourth largest oil producer, pumping nearly 5% of the world's oil in 2010. The threat of a major supply disruption from the country has helped support oil prices in recent weeks.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for February delivery dipped 0.15% to trade at USD111.97 a barrel, with the spread between the Brent and crude contracts standing at USD9.38 a barrel.

Euro trims losses in subdued trade ..

The euro trimmed losses against the U.S. dollar and the yen in subdued trade on Monday, as trading volumes remained thin with financial markets in Asia, the U.K. and the U.S. closed for the New Year holidays.

During European morning trade, the euro pared losses against the greenback, trading at 1.2954, up from the session low of 1.2922.

The single currency was almost unchanged against the yen, with EUR/JPY dipping 0.02% to trade at 99.64 after falling to a low of 99.67 during late Asian trade.

On Friday, the euro fell below JPY100 for the first time since June 2001 as concerns over the ongoing financial crisis in the euro zone weighed.

Earlier in the day, data showed that the final euro zone manufacturing purchasing managers’ index for December was unchanged at 46.9, confirming an earlier preliminary estimate.

A reading of less than 50 indicates a contraction in activity, while a figure of more than 50 signals expansion.

Commenting on the report, Chris Williamson, chief economist at Markit said "euro zone manufacturing is clearly undergoing another recession. Despite the rate of decline easing slightly in December, production appears to have been collapsing across the single currency area at a quarterly rate of approximately 1.5% in the final quarter of 2011".

The euro was higher against the broadly weaker pound, with EUR/GBP adding 0.13% to hit 0.8346. The greenback was also higher against sterling, with GBP/USD shedding 0.17% to hit 1.5521.

Meanwhile, the greenback remained fractionally higher against the yen and erased small early losses against the Swiss franc, with USD/JPY easing up 0.05% to hit 76.91 and USD/CHF inching up 0.05% to trade at 0.9394, up from a session low of 0.9372.

Elsewhere, the greenback was steady against its Canadian, Australian and New Zealand cousins, with USD/CAD shedding 0.22% to hit 1.0193, AUD/USD easing up 0.15% to hit 1.0222 and NZD/USD rising 0.10% to hit 0.7779.