The dollar advanced to a nine-month high versus the yen, after data reinforced upbeat views about the U.S. economy and backed the Federal Reserve’s signal for a steady course of rate increases over the next year.US Equities also remain supported by Fed Chair positive view on the US economy. However, it’s the EURO which buckled when Italian budget concerns reared it’s vexed, and ugly head as political squabbling over country’s deficit targets raged while the EU budget deadline looms. Italy on Thursday set its budget deficit target at 2.4 percent of gross domestic product for the next three years, defying Brussels and marking a victory for party chiefs over economy minister Giovanni Tria, who had pushed for a deficit below 2 percent. The euro has lost nearly 0.9 percent this week, having pulled back from a 3-1/2-month high scaled on Monday after European Central Bank chief Mario Draghi said he sees a vigorous pickup in euro zone inflation. The single currency had been on an uptrend in the last few weeks, bolstered by generally solid European economic data.
In forex today, thin data came across for the Asian session as investors continue to digest the week’s heavy Dollar action, with a rate hike from the US Fed and positive-leaning data for the domestic US economy driving the Greenback into the week’s end. Brexit headlines continue to weigh on GBP traders, with UK Prime Minister Theresa May continuing to be the rope in the middle of the tug-of-war between staunch EU leaders in Brussels, and hard-line Brexiteers within PM May’s own party in the UK, and uncertainty over Brexit continues to weigh on confidence. Today we have Britain’s quarterly GDP at 08:30 GMT, with the q/q figure forecast to hold steady at 0.4%, while the upcoming US session will see the final round of heavy data for the US this week, with the Core Personal Consumption Index slated for 12:30 GMT and expected to clock in at 2% for the year into August, a steady hold from the previous reading.