Asian session: The dollar was set to fall against most of its 16 major peers

The dollar was set to fall against most of its 16 major peers this week as Asian shares extended a global rally, damping demand for lower-yielding assets.

The Australian dollar rose, extending its gains this week, before U.S. reports that may show improvements in home sales and consumer spending, boosting demand for higher-yielding currencies.

The so-called Aussie strengthened to a two-week high against the yen as Asian stocks extended a rally in global equities.

The New Zealand currency, known as the kiwi, briefly pared a weekly advance after an earthquake struck near the city of Christchurch. Demand for the South Pacific nations’ currencies was limited as Italy prepares to sell bonds next week amid concern Europe’s debt crisis will weigh on global growth. Italy is scheduled to auction 9 billion euros ($11.8 billion) of bills and as much as 2.5 billion euros of bonds on Dec. 28, followed by sales of debt maturing in 2014, 2018, 2021 and 2022 the next day.

S&P said this month it may cut the credit grades of 15 euro nations, including Italy, France and Germany.

EUR/USD: on Asian session the pair gain.

GBP/USD: on Asian session the pair gain.

USD/JPY: on Asian session the pair fell.

European data for Friday starts at 0630GMT with the detail of France Q3 GDP data, which is followed by France PPI for November at

0745GMT. UK data at 0930GMT includes BBA Banking Data, Mortgage Approvals as well as the latest Index of Services data. At 0830GMT, the Swiss National Bank is due to publish it's Q4 Quarterly Bulletin. US data starts at 1300GMT with the latest Building Permits Revision,

while data at 1330GMT includes durable goods orders and also Personal Income data. Then, at 1500GMT, US New home sales are forecast to rise to a 313,000 annual rate from the 307,000 rate in October. Late US data sees the 2115GMT release of Commercial & Industrial Loans.