The dollar surged to a 2-week peak against the euro on Friday, as traders shrugged off an historic deal by the European Union to to protect its monetary union following a two-day summit in Brussels.
Even with EU officials saying that the will preserve the euro at all costs, competitiveness gaps within the 16-nation bloc remain a significant hindrance to growth, as debtors like Spain and Portugal face a long road back to fiscal health.
Moody's Investor Service downgraded Ireland's rating by five notches, from Aa2 to Baa1, citing the nation's troubled banks. Spain was put on warning for a downgrade earlier in the week.
Meanwhile, leading economic indicators in the U.S. increased for the fifth straight month in November, according to a report released by the Conference Board on Friday, with the monthly increase coming in nearly in line with economist estimates.
The Conference Board said its leading economic index increased by 1.1 percent in November after a downwardly revised 0.4 percent increase in October. Economists had expected the index to increase by 1.2 percent. The dollar rose to $1.3150 versus the euro, edging back toward a recent 4-month high near 1.2960.
The buck touched $1.5575 against the sterling, its highest since September.
There was little movement against the yen, signalling the dollar's strength was more a function of European weakness. The buck fetched Y84.13 against the yen, virtually unchanged from a month ago.
The Bank of England and European Central Bank on Friday announced a temporary reciprocal swap agreement, which will enable the BoE to provide up to GBP 10 billion to the ECB in exchange of euros.
This precautionary measure would enable the ECB to provide sterling liquidity to its banks.
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May 08, 2026 15:50 ET Manufacturing and services sector survey results and labor market data from main economies were the highlight on the economics news front this week. Factory orders and jobs report dominated the news flow in the U.S. Similarly, industrial production data from German garnered attention in Europe. In Asia, purchasing managers’ survey results from China and the central bank decision from Australia were in focus.