London Session Recap

Daily Forex Fundamentals | Written by Forex.com | Nov 25 08 13:59 GMT |

The risk trade was pared in London trading on the back of the fallout of the $66 billion hostile takeover of Rio Tinto by BHP Billiton. This sent a small shockwave through equity marts as it reaffirmed the reality that the global economy is slowing down in a big way. European stocks drifted back to flat on the day (recently recovered though) and the risk trades in FX were lower on the follow. EUR/USD was down a modest -20 pips and was sitting near the 1.2850 area ahead of the NY open. JPY crosses were expectedly weaker. USD/JPY slipped -45 pips towards 96.00/10 while EUR/JPY shed a more aggressive -75 points into the 123.50 area. This reversed promptly at the NY open as fresh news out of the Fed sparked a new rally in risk. The news that the Federal Reserve will directly support consumer and small business lending led US stock futures markedly higher in the NY open. The S&P 500 went from negative small to up more than 24 points. This has Euro trading near the critical 1.3000 resistance zone though USD/JPY has failed to make a significant move towards the pivotal 97.50 area. We would expect higher US stocks on the day to see fresh intraday highs in the FX risk trades, though the risk of a reversal into the lows looms as well. Stay focused on the price action in equities. Upcoming Economic Data Releases (NY Session) Prior Estimate 11/25/2008 14:00 GMT US S&P/CS Composite-20 YoY SEP -16.60% -16.90% 11/25/2008 14:00 GMT US S&P/Case-Shiller US HPI YOY% 3Q -15.40% -17.10% 11/25/2008 15:00 GMT US Consumer Confidence NOV 38 38.5 11/25/2008 15:00 GMT US Richmond Fed Manufact. Index NOV -26 -26 11/25/2008 15:00 GMT US House Price Index MoM SEP -0.60% -0.70% 11/25/2008 22:00 GMT US ABC Consumer Confidence 23-Nov -52 - - Forex.com http://www.forex.com DISCLAIMER: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase of sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.