The U.S. dollar reached a four-week peak against a basket of major currencies on Friday as investors sought its safe-haven status on the possibility of a U.S. military strike on Syria.
U.S. Secretary of State John Kerry made a broad case for limited U.S. military action against Syria for its alleged use of chemical weapons, saying it could not go unpunished for such a "crime against humanity."
A team of U.N. investigators has finished gathering samples and evidence in Syria related to a the suspected chemical weapons attack that killed hundreds of people in suburbs near Damascus last week and is packing up to leave, a U.N. spokesman said on Friday.
A U.S. intelligence report disclosed that there was "high confidence" that Syrian forces had used chemical weapons multiple times in the last year, including the Aug. 21 attack outside Damascus.
US Secretary of State John Kerry said on Friday that Syrian govt planned and ordered chemical attack:
-US will not repeat Iraq experience in intelligence on Syria;
-Syrian regime elements were in area before chemical weapons attack and were told to wear protective masks;
-Rockets involved in Aug 21 attack in Syria came only from government sites.
Data released this week showed the US Gross domestic product rose at a 2.5% annualized rate, up from an initial estimate of 1.7%. The median forecast projected a 2.2% gain.
EURO
The euro tested a five-week low this week.
Upbeat data from the euro zone weren’t enough to lift the euro. The Economic Sentiment Indicator rose sharply by 2.7 in August to 95.2, beating expectations of a 93.7 reading.
Additionally, data showed the number of unemployed people in the euro zone fell in July for the second straight month, although the improvement wasn’t enough to bring down the unemployment rate from its all-time high of 12.1%.
Data released showed the unemployment change in the German economy increased by 7K during the month of August, coming in lower than both the median and July’s reading. The jobless rate stayed put at 6.8%, broadly in line with market consensus.
The IFO German confidence survey showed business sentiment was at its highest level in 16 months but that had only a fleeting impact on the euro.
Investors will be wary of buying the euro before next week's European Central Bank interest rate meeting, where policymakers are likely to reiterate their pledge that rates will be low for some time as economic recovery sets in slowly.
POUND
The pound eased despite a measure of British consumer confidence increased in August and a gauge of house prices rose.
Bank of England Governor Mark Carney on Wednesday failed to convince investors that the central bank will keep interest rates at an all-time low.
Thursday, the U.K. parliament rejected a preliminary vote to become involved in military strikes in Syria, easing fears of an imminent attack.
The Bank of England Governor Carney said forward guidance will help the economic recovery in his first policy speech since taking over on July 1. He also said the BOE is focused on sustaining the economic recovery despite the “inevitable shocks ahead.”
Data released Friday showed consumer credit in Great Britain continues to gradually improve, rising by £0.6 billion in July from around flat at the start of the year and mostly negative growth in 2012. Meanwhile, mortgage approvals surprised on the upside at 60.6k, the first print above 60k since mid-2008.
The pound gained 2.1% against the greenback this month, the best performance among the major currencies.
The pound has strengthened 5% in the past six months.
YEN
It was a volatile week for the yen with investors were buying the Japan’s currency as a haven.
Bank of Japan board’s member said on Thursday that the global economy could be hurt if the withdrawal of funds from emerging markets picks up.
Yoshihisa Morimoto also signalled that Japan's government needed to proceed with a planned two-stage hike in the sales tax as part of efforts to fix its tattered finances, or face a severe market backlash.
He shrugged off the need to loosen monetary policy again to ease the pain from the tax hikes.
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