U.S. Housing Data Save the Sterling

U.S. Housing Data Save the Sterling. Sterling turned slightly higher versus the greenback after data showed new home sales in the U.S. were worse than expected in December. Cable previously had been hit by the UK GDP data, which showed the economy shrank 0.3% in the 4th quarter of last year. The contraction of the economy has put the UK on the verge of a triple-dip recession that has never happened before.

LTRO Payments Exceed Expectations, Euro Rally

The euro rallied after the European Central Bank announced a loan payment amount by the bank's higher than expected, supporting expectations of settlement in the region's debt crisis. 278 reported bank will refund the € 137 billion loan obtained through the Long Term Financing Operation (LTRO) in the next week, beating a payment of € 100 billion. The data showed an increase in business confidence in Germany also helped support the euro movement.

"Payment of the loan that exceeds expectations will certainly bring some impact on the Eurozone liquidity conditions, which are also considered a sign of easing from the European crisis," said Nick Bennenbroek, head of currency strategy at Wells Fargo Bank in New York.

Disappointing CPI data To Yen

Yen record weekly drop against the U.S. dollar following poor Japanese inflation data for December. The consumer price index, which excludes fresh food, fell 0.2% from the previous year. While the Yen weakened sharply since late last year and the Japanese government steps in loosening fiscal and monetary policy concerns has invited world leaders, including German Chancellor Angela Merkel who see Japan as a source of concern.

European Stock Green, Sustained Data ECB Loans

European stocks extended their gains in the last 23 months as rising German business confidence figures and the central bank data showed that the borrower will pay back more than what analysts had expected for a 3-year loan tenure. Stoxx Europe 600 Index rose 0.3% to 289.72 at the close in London, extending its gain this week to 0.9%. The index has rallied as much as 3.6% this year, the index is currently experiencing a significant gain since July 1997 after U.S. lawmakers reached a budget agreement. "I feel this year is full of hope after all the global economic indicators increased," said Kevin Lilley, finance manager at Old Mutual Asset Managers in London. "Market will move higher, the current price is still cheap, and many will be seen as a reduction in opportunity to buy. "

Rajoy : EU Needs Expansionary Policy

Spanish Prime Minister Mariano Rajoy said Friday that some European Union countries have audacious run expansionary policies to boost economic growth in the region, as part of efforts to help other countries who were distressed by the cuts in public spending and debt. "Spain is not in condition to run an expansionary policy, but countries that are able to do it," said Prime Minister Rajoy told a news conference after meeting with President of Chile, Sebastian Pinera. Rajoy found expansionary policies will help the region cope with the pressure that has significantly slowed economic growth in the European region. Rajoy also confirmed that the Spanish government will continue to pursue structural reforms in order to lower the budget deficit. Throughout this year Spain has issued approximately € 20 billion in Treasury debt, which indicates if the steps taken by the European Union to boost investor confidence and the euro started to gain traction.