Dollar Benefits from Spanish Credit Downgrade

The US dollar saw upward movement on Friday, as investors shifted their funds to the safe-haven currency following another Spanish credit rating downgrade earlier in the week. The GBP/USD fell over 100 pips during Asian trading, reaching as low as 1.5402 during early morning trading before correcting itself to finish out the week at 1.5472. Against the AUD, the dollar was able to start the day off by gaining close to 90 pips. That being said, the aussie was able to climb back during the European session, eventually recouping all of its earlier losses. The AUD/USD closed the week at 0.9914. Turning to this week, dollar traders will want to pay attention to several potentially significant economic indicators. On Wednesday, the Retail Sales, Core Retail Sales and PPI figures could cause the USD to fall vs. the JPY if the figures come in below their forecasted levels. Later in the week, the Unemployment Claims and Core CPI figures, followed by the Prelim UoM Consumer Sentiment may lead to market volatility if they do not come in as expected. Should any of the figures disappoint, it could lead to further worries regarding the US economic recovery and whether the Fed is planning to initiate a new round of quantitative easing.

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