The dollar firmed against the basket of major currencies on Friday and moved towards weekly highs, posted few days earlier. Positive sentiment is returning after dollar bulls paused on Thursday, pressured by downbeat Chinese data. Investors are awaiting US Retail Sales data, which could further reinforce expectations of US interest rate hike this year.
Better-than-expected data from China, released on Friday, comforted investors and offset negative tone from Thursday, boosting the dollar again.

The dollar index hit session high at 97.85 on bounce from Thursday’s correction low at 97.50, returning above the midpoint of pullback from fresh multi-month high at 98.11.
The dollar is on track for the second consecutive bullish weekly close that confirms strong bullish stance on expectations of Fed’s rate hike action towards the end of the year.

The greenback also firmed against Euro, hitting session low at 1.1019, after initial rejection below psychological 1.1000 support and subsequent bounce to 1.1057 high on Thursday.
Japanese yen weakened against the dollar on Friday and returned to 104.00 zone, after two-legged pullback from fresh high at 104.61 found support at 103.30.
British pound slipped 0.6% in Asia, on dip to 1.2183, but regained ground in Early Europe on bounce above 1.2200 mark.
British Prime Minister Theresa May’s offer to involve lawmakers in the process of leaving the European Union has calmed some investors’ fears of a hard Brexit, though uncertainty over the impact of the move is likely to keep the pound under pressure, as the pound is on track for weekly losses of over 2%.
Oil prices edged higher on Friday, with US oil price probing above $51.00 barrier in early European trading, pushed by tighter US fuel market and firmly bullish technicals.
Stronger-than-expected build of US crude stocks last week initially pushed the price close to weekly low, but did not showed stronger impact on oil price, which is on track for the third consecutive bullish weekly close.
Asian stocks erased some losses from the previous day on Friday’s bounce, boosted by better-then-expected Chinese inflation data. MSCI Index was up 0.4% on Friday, recovering part of Thursday’s 1.1% fall.
Japan’s Nikkei 225 was up 0.87% for the session, while Singapore Index gained 0.52% in Asia.
European Stocks opened higher on Friday.
UK’ FTSE100 Index is up 0.59% on Friday after suffering strong losses in past three days.
German DAX recovered by 0.47% after Friday’s opening, as the price dipped to 10336 low on Thursday, but failed to sustain losses.

Highlights of the day

Asia
Upbeat data from China on Friday restored positive sentiment in the markets that showed rising concerns about the health of the second biggest world economy after downbeat data on Thursday.
Inflation in September rose to 1.9% from 1.3% in August and above forecast at 1.6%.
Also, Producer Price Index was up 0.1% in September, after falling by 0.8% in August and well above forecast that stood at -0.3%.

America
Investors are focusing at US Retail Sales data, due at 12:30 GMT today and speech of Fed chair Janet Yellen, due at 17:30 GMT.
Us Retail Sales are forecasted to rise by 0.6% in September, after showing negative reading at -0.3% in August. Core Retail Sales are also expected higher in September, according to forecast at 0.4% vs -0.1% in August.
Positive numbers of Retail Sales today are expected to cement expectation for Fed’s rate hike towards the end of the year.
Important levels
US Crude Oil
The oil price continues to head higher and probes above $51.00 barrier. Negative impact from strong US Crude stocks build was quickly offset, after dips found support at $49.36, above weekly low at $49.14.
Immediate focus turns towards week’s high at $51.58 and peak at $51.65 (posted on 09 June), with sustained break higher to open projected target at $53.00 zone.
Initial supports lay at $50.76 and $50.44, ahead of psychological $50.00 and $49.60.
USDJPY

The pair regained strength and back above 104.00 barrier, focusing key n/t barrier at 104.62, as daily
cloud top acted as solid support and contained dips on Thursday. Firm break above 104.62 and
weekly close above Fibonacci 104.43 barrier will open way for fresh extension towards 105.00 and
105.60.
Session low and daily cloud top at 103.50 zone, offer strong support.
EURUSD
The Euro is back in red on Friday and pressures psychological 1.1000 support which was cracked on Thursday’s dip to 1.0984, but losses were rejected higher. Subsequent bounce was capped at 1.1060 zone, ahead of fresh weakness. The pair is on track for strong bearish weekly close, with close below 1.1000 handle, needed to confirm strong bearish sentiment for extension towards targets at 1.0950 and 1.0909, Market Analysis