The London session was nearly a mirror image of yesterday as Cable saw another leg-down on the back of poor economic data. UK jobless claims for December rose a touch less than expected at 77.9K but the prior month was revised up to 83.1K from 75.7K and offset the better result. The claimant count rate jumped to 3.6% from 3.3% and is a better reflection of the deterioration in the UK job market. The other big news was in the BOE minutes, which showed that one member wanted a larger than the decided -50bps rate cut. In an environment where the transmission mechanism for rates is compromised though, it's unclear that more aggressive action would do much to alleviate the pain.

GBP/USD slipped about -70 pips in the session and was sitting near the 1.3750 pivot ahead of NY trading. Below should see a revisit to the 1.3730/20 intraday lows. EUR/USD added about 35 points towards the 1.2930/40 area as the earlier decline towards 1.2860/50 saw buying interest. Macro names were ostensibly in the bid into 1.2850 yesterday and this looks like the next critical pivot point here. The price action in the yen crosses was lukewarm as USD/JPY was practically unchanged near 89.80/85 while EUR/JPY added about 25 pips towards the 116.20/30 zone. With the lack of any major economic data due up in NY today, expect FX risk trades to move in tandem with stocks.

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