The US dollar continues to trend lower against European currencies

This week’s pattern remainsintact.  The US dollar continues to trend lower against the European
currencies, but is firmer within the dollar-bloc and against the yen.
Spanish and Italian bond yields are lower, while the long-end of the
Japanese curve is heavy.  Equity markets are finishing the year with a
firm note, with board gains in Asian, with the notable exception of
Shanghai and Jakarta, and in Europe, with the exception of Stockholm.

Theeuro is at 7-month highs today, pushing toward $1.3300. The next target
is near $1.3385.    Sterling has been bid to near the year’s high set
in late September just above $1.6300. There is little chart resistance
until closer to $1.6500.   The dollar’s slide against the Swiss franc
has extended to CHF0.91 and appears headed for CHF0.9000.

The dollar-bloc is not participating in this move against the greenback.
This week, for example, the New Zealand dollar has fallen as almost as
much as the yen (1.03% and 1.08% respectively).  The Australian and
Canadian dollars are off 0.04% and 0.57% respectively.

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