The euro ended the week near one-month highs against the dollar on Friday and was close to five year highs against the yen, after data showed that the annual rate of inflation in the euro zone rose more-than-expected in November, easing concerns over further rate cuts by the European Central Bank.
Eurostat said the annual rate of consumer inflation rose by 0.9% in November, recovering from a four year low of 0.7% in October. Economists had forecast an annual increase of 0.8%.
Another report showed that the euro zone unemployment rate fell to 12.1% in October, down from 12.2% in September, the first fall since February 2011. However, the youth unemployment rate in the region rose to record high of 24.4% in October.
EUR/USD ended Friday's session at 1.3591, slightly below session highs of 1.3622. For the week, the pair gained 0.42%.
The euro ended the week 1.46% higher against the broadly weaker yen, with EUR/JPY settling at 139.21, the highest level since June 2009.
The yen remained under heavy selling pressure amid heightened expectations that the Bank of Japan will implement further stimulus measures in order to meet its target of 2% inflation by 2015.
On Wednesday, BoJ board member Sayuri Shirai raised doubts over whether the inflation target can be met because of downside risks to growth, adding that the bank was open to taking further steps if growth slows.
The dollar hit a six month high of 102.61 against the yen on Friday, the highest level since May 23. USD/JPY ended Friday's session at 102.44. For the week, the pair was up 1.06%, the fifth consecutive weekly gain.
Elsewhere, the pound rose to 27-month highs against the dollar on Friday and climbed to five year highs against the yen. Sterling's gains came after the Bank of England said Thursday it was rolling back stimulus to the U.K. housing market.
GBP/USD hit highs of 1.6383, the highest since late August 2011, before ending the session at 1.6367. The pair ended the week with gains of 1.24%.
Sterling ended the week 2.32% higher against the struggling yen, with GBP/JPY settling at 167.74, the highest level since October 2008.
In the week ahead, focusing on Friday's U.S. nonfarm payrolls report for November, amid expectations that the Federal Reserve will start to scale back its stimulus program at one of its next few meetings.
Meanwhile, rate decisions by the ECB, the BoE, the Reserve Bank of Australia and the Bank of Canada will also be in focus.
Monday, December 2
Japan is to publish data on capital spending, a leading indicator of economic health.
Australia is to release data on building approvals, a leading indicator of future construction activity, as well as a report on company operating profits.
China is to release the final reading of its closely watched HSBC manufacturing PMI.
The euro zone is to release revised data on its manufacturing PMI, while Spain and Italy are also to release individual reports.
Switzerland is to publish the results of its SVME manufacturing PMI, and the U.K. is to release its manufacturing PMI.
Federal Reserve Chairman Ben Bernanke is to speak at an event in Washington. Later Monday, the Institute of Supply Management is to release its manufacturing PMI.
Tuesday, December 3
Australia is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. The nation is also to produce data on the current account.
The RBA is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the bank's decision.
The U.K. is to release private sector data on retail sales, an important economic indicator.
In the euro zone, Spain is to publish data on the change in the number of people employed.
The U.K. is to release its construction PMI.
Wednesday, December 4
Australia is to release data on third quarter gross domestic product, the broadest indicator of economic activity and the leading measure of the economy's health.
The euro zone is to release data on retail sales, while Spain and Italy are to publish their services PMI's.
The U.K. is also to publish its services PMI, a leading indicator of economic health.
The U.S. is to release the ADP report on private sector job creation, which leads the government's nonfarm payrolls report by two days.The Institute of Supply Management is to release its services PMI. The U.S is also to publish data on new home sales.
Both the U.S. and Canada are to release data on the trade balance, the difference in value between imports and exports.
The BoC is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the bank's decision.
Thursday, December 5
Australia is to publish data on the trade balance.
The BoE is to announce its benchmark interest rate.
Later in the day, the ECB is to announce its benchmark interest rate. The announcement is to be followed by a press conference with President Mario Draghi.
Canada is to publish data on building permits and the Ivey PMI.
The U.S. is to publish a revised estimate of third quarter gross domestic product, the broadest indicator of economic activity and the leading indicator of economic growth. Meanwhile, the Labor Department is to release its weekly report on initial jobless claims. The U.S. is also to publish data on factory orders.
Friday, December 6
The Swiss National Bank is to publish data on its foreign currency reserves. This data is closely scrutinized for indications of the size of the bank's operations in currency markets.
Switzerland is to release data on consumer inflation, which accounts for the majority of overall inflation.
Germany is to release data on factory orders.
Canada is to release data on the change in the number of people employed and the unemployment rate.
The University of Michigan is to release the preliminary reading of its consumer sentiment index. The U.S. is to round up the week with the closely watched government data on nonfarm payrolls and the unemployment rate.