London Session Recap

Daily Forex Fundamentals | Written by Forex.com | Dec 11 08 13:18 GMT |

The US dollar was clobbered some more in London trading as the recent deterioration in the economic outlook continues to weigh on the currency. Risk taking in equities was nonexistent as European bourses were basically flat on the day at last look. US stock futures are also pretty well unchanged at the moment as well. FX was really on its own here as EUR/USD added more than 100 points to overnight gains and was sitting near 1.3220/30 ahead of the NY open. The 1.3330/50 area now looks like the next critical hurdle and this is where the sharp break to the downside first occurred back in late October. We would expect a break above here would see a likely try for 1.35 next. Dollar selling was also prevalent against the yen. USD/JPY plunged about -100 pips in the session into the 91.50/60 zone as the pair continues to follow US yields lower. The 91.50 level looks like critical support here and a break should usher in a move back to the 2008 lows of 90.90 initially. GBP/USD shed -90 pips despite the weakness in the buck and despite the Confederation of British Industry’s monthly survey of UK manufacturers showing total orders improving to -35 in December from -38 previously. The expected volume of output for the next three months, however, remained dismal at -42 and unchanged from the prior month. The price action should be good in early NY as top-tier data for the US looms. Initial jobless claims for the week are expected to grind higher to 525K from 509K while the US trade balance is forecast to print -$53.5 billion in October from -$56.5 previously. The jobless number is likely to be more closely watched here and a number approaching the -600K mark should see further weakness in the greenback. Stay tuned! Upcoming Economic Data Releases (NY Session) Prior Estimate 12/11 8:30 ET OCT CA Int'l Merchandise Trade 4.5B 3.3B 12/11 8:30 ET OCT CA New Housing Price Index MoM 0.10% -0.10% 12/11 8:30 ET OCT US Trade Balance -$56.5B -$53.5B 12/11 8:30 ET NOV US Import Price Index (MoM) -4.70% -4.90% 12/11 8:30 ET 6-Dec US Initial Jobless Claims 509K 525K 12/11 8:30 ET 29-Nov US Continuing Claims 4087K 4100K 12/11 13:00 ET 11-Dec GE ECB's Weber Speaking in Frankfurt 12/11 16:45 ET OCT NZ Retail Sales (MoM) 0.10% 0.00% 12/11 16:45 ET OCT NZ Retail Sales Ex-Auto (MoM) -0.50% 0.80% 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.