Aussie Drops on Data - 9.1.2012

US Dollar The dollar dropped against its major counterparts in Asian trading hours as investors are waiting for the outcome of negotiations between the German and French leaders today. The dollar index fell from its high in more than a year (81.37) to 81.08 at the beginning of the European session. The US economy meanwhile continues showing signs of recovery. James Bullard, the head of the Federal Reserve Bank of St. Louis, said in one of recent interviews that the central bank probably won’t begin a new round of bond purchases following “encouraging” data showing the US economy gained 200000 payrolls in December, while unemployment rate declined to 8.5% from 8.7%. Euro The euro strengthened against the dollar and the yen, recovering partly its previous losses, before German Chancellor Angela Merkel and French President Nicolas Sarkozy meet today in Berlin to discuss new budgetary discipline rules. At the same time the data may show today German industrial production dropped in November 0.5% in annual figures, following a 0.8% gain in October. After touching today the lowest level since September 2010 (1.2666) against the greenback, the euro advanced toward 1.28 by the beginning of the European session. Australian Dollar The Aussie touched its lowest level in 2012 (1.0144) against the US counterpart after Australian retail sales unexpectedly stalled in November, ending four months of gains. Sales remained unchanged from a month earlier, when they rose 0.2%, the Bureau of Statistics reported today. Nevertheless the general market mood has outweighed little favorable national statistics helping the Australian dollar to advance in the aftermath to 1.0230.