The pair is likely to trade in a tight range today in Asia, with investors refraining from taking fresh positions due to the closure of many overseas markets for the Christmas break and ahead of the approaching New Year’s break. Meantime, weakening risk aversion is expected to support higher-yielding currencies amid signs that the US economy is gaining traction. Last week’s data showed that initial claims for US state unemployment benefits dropped unexpectedly by 4,000 to 368,000 in the December 17 week, the lowest level since the April 19, 2008 week. Conference Board’s Consumer Confidence Index, due Tuesday, is expected to have improved to 59.0 in December from 56.0 in November, while he ISM manufacturing index, due Jan. 3, is expected to have increased to53.5 in December from 52.7 in November, according to MNI survey of economists. Investors will also focus on any developments on the sovereign debt crisis in Europe for implications for risk sentiment. The USD ranged from Y77.97 to Y78.22 on Friday.
EasyForexNews Research Team