The dollar weakened against its peers on Friday following the release of discouraging US economic figures and as the market continued on in risk off trade mode amid new declines in oil prices.  The dollar was weighed down by data which revealed that US retail sales dropped surprisingly in December while US industrial production in December marked its 3rd monthly decline in a row.  US retail sales dropped 0.1% in December compounding forecasts of a 0.1% increase.  US industrial output declined 0.4% in December while experts forecast a 0.2% decline amid reduced energy costs as US producer prices also dropped in December.  Oil prices were pushed lower dropping to below $30 a barrel amid the ongoing global supply surplus as the market anticipates Iran continuing exports once international sanctions are removed.  The US dollar index was off 0.13% on the day trading at 98.99 in late trade.

The euro strengthened against the dollar with the pair trading at 1.0915 towards Friday’s close off its session high of 1.0984 after having come off its session low of 1.0854 reached earlier in the day.  The pair rallied close to 1 month highs as US data increased the likelihood the Federal Reserve will push back its next interest rate increase to after the first quarter.  The euro is up roughly 0.5% against the dollar after tanking roughly 10% against the dollar in 2015.  The European Central Bank is scheduled to make its monetary policy announcement on Thursday.

The pound weakened against the dollar with the pair trading at its session low of 1.4250 towards Friday’s close after having come off its session high of 1.4426 reached earlier in the day.  The pound dropped to new 5.5 year lows as market sentiment remained under pressure.  The pound may be pushed even lower next week and extend its decline from earlier this month if UK economic data dampens interest rate expectations.

The yen strengthened against the dollar with the pair trading at 117.04 towards Friday’s close off its session low of 116.50 its lowest level since August 24, after having come off its session high of 118.26 reached earlier in the day.  The yen remained supported by ongoing safe haven demand due to risk aversion given the current market climate.  

The Australian, New Zealand and Canadian dollars weakened against the greenback as further declines in oil and commodity prices pressured these commodity associated currencies lower, as global equity markets also toppled due to fear of a global economic downturn intensifying.  The Aussie tanked down 1.73% against the dollar on the day with the pair trading at 0.6862 towards Friday’s close off its session low of 0.6826, after having come off its session high of 0.7002 reached earlier in the day.  The kiwi dollar plummeted to 3.5 month lows against the greenback with the pair trading at 0.6459 in late trade on Friday off its session low of 0.6380 after having come off its session high of 0.6491 reached earlier in the day.  The loonie dropped to new 12 year lows against the greenback with the pair surging up 1.22% trading at 1.4540 towards Friday’s close off its session high of 1.4553 after having come off its session low of 1.4342 reached earlier in the day.  The loonie was also made vulnerable by the market expecting the Bank of Canada to loosen its monetary policy even further next week at its upcoming policy meeting in order to tackle the latest drop in oil.   

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