The London session was pretty lackluster as activity cools down ahead of the US Thanksgiving Day holiday. EUR/USD was practically unchanged overall and was near the 1.2950/60 zone.
The 1.2900 area looks like important support as this was a price level that saw very good buying interest yesterday. Below here should see losses accelerate. JPY crosses were just modestly higher as USD/JPY rose about 40 points to 95.30/40 while EUR/JPY jumped 50 pips into the 123.50/60 zone.

Cable continued to head lower as the second cut 3Q GDP report for the UK showed no revision to the previously reported -0.5% quarterly rate. This coupled with forecasts that the Bank of England could take rates towards 0% and worsening balance of payment problems suggests the pair will remain under intense downward pressure. GBP/USD sank about -40 in London trading and was sitting near 1.5320/30 ahead of the NY open. We continue to favor selling rallies in Cable and especially into the 1.5500 zone.

There are a plethora of US economic data out this morning between 0830-1000ET with seven major reports due up. Durable goods, initial jobless claims and the Chicago PMI have the potential to move stocks the most and in turn the risk trades in FX. Look for better than expected data to push stocks higher for the fourth consecutive day here, while the inverse could see a major reversal ahead of the holiday.

Upcoming Economic Data Releases (NY Session) Prior Estimate

  • 11/26/2008 13:30 GMT US Durable Goods Orders OCT 0.80% -2.70%

  • 11/26/2008 13:30 GMT US Durables Ex Transportation OCT -1.10% -1.50%

  • 11/26/2008 13:30 GMT US Personal Income OCT 0.20% 0.10%

  • 11/26/2008 13:30 GMT US Personal Spending OCT -0.30% -1.00%

  • 11/26/2008 13:30 GMT US PCE Core (YoY) OCT 2.40% 2.30%

  • 11/26/2008 13:30 GMT US PCE Core (MoM) OCT 0.20% 0.10%

  • 11/26/2008 13:30 GMT US PCE Deflator (YoY) OCT 4.20% 3.30%

  • 11/26/2008 13:30 GMT US Initial Jobless Claims 22-Nov 542K 531K

  • 11/26/2008 13:30 GMT US Continuing Claims 15-Nov 4012K 3997K

  • 11/26/2008 14:45 GMT US Chicago Purchasing Manager NOV 37.8 38

  • 11/26/2008 15:00 GMT US U. of Michigan Confidence NOV F 57.9 57.9

  • 11/26/2008 15:00 GMT US New Home Sales OCT 464K 440K

  • 11/26/2008 15:00 GMT US New Home Sales MoM OCT 2.70% -3.00%

  • 11/26/2008 15:35 GMT US DOE U.S. Crude Oil Inventories 21-Nov 1599K - -

  • 11/26/2008 15:35 GMT US DOE U.S. Gasoline Inventories 21-Nov 539K - -