Greenback stabilizes ahead of the weekend - BBH

Global currency strategy team at BBH Markets, in its daily CurrencyView report, analyzed the US Dollar price-action on Friday in absence of any major economic releases. 

Key Quotes:

"The US dollar is finishing the week on a steady to firmer note against the major currencies, except for the Japanese yen.  Softer yields and weaker equity markets are often associated with a stronger yen.   For the week as a whole, the dollar is mostly lower, though net-net it has held its own against sterling, the euro, and Canadian dollar."

"An important takeaway from this week is the combination of mostly firmer US data (including February Fed surveys, and January CPI, industrial output and retail sales) coupled with clear indications from the Fed's leadership (Yellen, Fischer and Dudley) that the normalization process is likely to accelerate this year (from 2015 and 2016) but remain gradual.  The implied yield of the March Fed funds futures rose a single basis point to 69 bp, while the implied yield on the June contract rose 3.5 bp to 85.5.  The implied yield on the December contract rose 5 bp to 115.5."

"The dollar's pullback since mid-week has tested retracement objectives of the recent run.  The $1.0675 level in the euro represents the 50% retracement target of the decline from February 2.  The similar level in the Dollar Index is found near 100.50.  The dollar is heavier against the yen.  It has retraced a little more than 61.8% of its gains from the February 7 low near JPY111.60 to nearly JPY115 on February 15.  That retracement is around JPY112.90."

"The North American session features the US Leading Economic Indicators and Canada's international securities transactions.  The market does not appear particularly sensitive to either report.  There are no Fed officials scheduled to speak.  The US is on holiday Monday and this means liquidity may drop off more than usual what Europe closes."