CANBERA (dpa-AFX) - The U.S. dollar extended its early gain against other major currencies in the Asian session on Friday, as traders are now concerned about how quickly the U.S. Fed will continue to lower interest rates next year after a report showed producer prices in the U.S. increased by more than expected in the month of November.
Data from the Labor Department showed on Thursday that the producer price index for final demand climbed by 0.4 percent in November after rising by an upwardly revised 0.3 percent in October. Economists had expected producer prices to inch up by 0.2 percent, matching the uptick originally reported for the previous month.
The report also said the annual rate of producer price growth accelerated to 3.0 percent in November from an upwardly revised 2.6 percent in October. The annual rate of producer price growth was expected to rise to 2.6 percent from the 2.4 percent originally reported for the previous month.
According to the CME FedWatch tool, markets are now nearly completely pricing a 25-basis point interest rate cut at the Fed's meeting on December 17-18, up from roughly a 78% possibility a week ago.
In the Asian trading now, the U.S. dollar rose to more than a 2-week high of 1.0457 against the euro and nearly a 2-week high of 1.2658 against the pound, from yesterday's closing quotes of 1.0467 and 1.2670, respectively. If the greenback extends its uptrend, it is likely to find resistance around 1.03 against the euro and 1.24 against the pound.
Against the yen and the Swiss franc, the greenback advanced to more than a 2-week high of 153.09 and a 3-week high of 0.8931 from Thursday's closing quotes of 152.62 and 0.8920, respectively. The greenback may test resistance around 156.00 against the yen and 0.90 against the franc.
Against Australia, the New Zealand and the Canadian dollars, the greenback climbed to a 2-day high of 0.6354, more than a 1-year high of 0.5758 and more than a 4-1/2-month high of 1.4244 from yesterday's closing quotes of 0.6367, 0.5769 and 1.4220, respectively. On the upside, 0.61 against the aussie, 0.55 against the kiwi and 1.43 against the loonie are seen as the next resistance levels for the greenback.
Looking ahead, German trade reports for October, wholesale prices for November, U.K. GDP data, industrial and manufacturing productions data and Goods trade balance data, all for October and Eurozone industrial production for October, are slated for release in the European session.
In the New York session, U.K. NIESR monthly GDP tracker for November, Canada manufacturing and wholesale sales data for October, U.S. import and export prices for November and U.S. Baker Hughes oil rig count data are due to be released.
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