Little was stirring in currency markets on Friday as dealers bedded down for the Christmas holidays, though the mood remains bullish for more dollar gains in the New Year as yield spreads widen in its favour.
The dollar rally has been fuelled in part by bets that the incoming Trump Administration and a Republican-controlled Congress would slash taxes and boost debt-funded spending, pushing up inflation and bond yields.
"Yields spreads should attract more capital into the USD," said Ray Attrill, global co-head of FX at NAB.
Yet Attrill also saw reasons why the dollar might not rise as far as some bulls expect.
"We aren't expecting 10-year US yields to make a sustained move above 2.75 percent in 2017. This is more consistent with a 3-5 percent rise in the USD than 10 percent."
Deutsche Bank has agreed to a $7.2 billion settlement with the U.S. Department of Justice over its sale and pooling of toxic mortgage securities in the run-up to the 2008 financial crisis.
As part of the agreement, Deutsche Bank would pay a civil monetary penalty of $3.1 billion and provide $4.1billion in consumer relief, such as loan forgiveness. The bank cautioned that there is "no assurance" the two sides will agree on the final documents
Oil prices slipped on Friday in thin Asian trade ahead of the Christmas and New Year holidays, eroding some of the gains in the previous session as traders took profits.
Brent futures LCOc1 for February delivery dropped 20 cents, or 0.4 percent, to $54.85 a barrel as of 0616GMT after ending the previous session up 1.1 percent.
U.S. West Texas Intermediate crude CLc1 fell 26 cents, or 0.5 percent, to $52.69 a barrel after settling up0.9 percent in the previous session.
Reference: Reuters
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