Foreign exchange market. Asian session: the U.S. dollar retreated

Economic calendar (GMT0):

Time/ Region/ Event/ Period/ Previous/ Forecast/ Actual

00:00 Australia HIA New Home Sales, m/m November -3.0%

05:00 Japan Leading Economic Index (Finally) October 101.6 102.9 104.2

05:00 Japan Coincident Index (Finally) October 112.3 114.3 113.8

The U.S. dollar declined against the euro and the pound after recent gains, which were generated by the Federal Reserve's rate hike. Expectations of higher rates and the 25 basis points hike supported the greenback earlier. Nevertheless investors have already taken advantage of this event and now market participants are focused on further increases in 2016. Most analysts don't expect the Federal Reserve to raise rates again before April 2016.

The yen fell against the greenback amid weaker-than-expected data. Japanese retail sales fell by 2.5% m/m in November. The index declined 1.0% on an annualized basis. Meanwhile industrial production declined 1.0% m/m in November, but gained 1.6% on a y/y basis. Industrial production declined because of weak demand from emerging markets.

Trading volumes are still low after catholic Christmas and ahead of New Year. Market participants close their orders and try not to open new ones ahead of the holiday. That's why liquidity declines and volatility rises.

EUR/USD: the pair rose to $1.0975 in Asian trade

USD/JPY: the pair rose to Y120.55

GBP/USD: the pair rose to $1.4935