USD - The dollar is mixed this morning with liquidity quickly thinning out ahead of the Thanksgiving holiday in the US.   Notable gains have been posted against many of its higher-yielding commodity linked counterparts as global economic growth remains a cause for concern.  Investors were met with mixed economic data this morning with a measure of consumer confidence falling while jobless claims and leading indicators both improved.  The improved labor picture is most notable, but not unexpected, as the jobs market recovers in the wake of Hurricane Sandy’s disruption along the East coast.  Claims came in at 410K down from 451K last week. Leading indicators also improved, gaining by 0.2% vs. the 0.1% rise in the previous reading as investors feel a bit better about lawmakers taking the necessary steps to avoid the so-called “fiscal cliff.”  While the dollar traded through a particularly choppy overnight session, expect calmer trading ahead as participants get an early start on the holiday.

EUR – The common currency rebounded from initial sharp declines overnight after Eurozone leaders failed to come to an agreement on easing terms on Greece’s outstanding “bailout” loans.  While leaders agreed in principle to extend the maturity of some Greek debt instruments by two years, the embattled nation is still projected to miss deficit targets through 2020, requiring either further financial assistance or lower interest rates on its loans.  Northern European representatives are unwilling to go back to their respective parliaments to request further aid, but the group as a whole appears rather unwilling to accept a haircut on earned interest as well.  Nevertheless, investors remain hopeful with the group set to reconvene this coming Monday.  Meanwhile, further violent protests rocked the streets of Athens as Greek PM Samaras introduced yet another round of cuts to the country’s social welfare apparatus.  Consequently, this morning’s rise in the EUR is likely more reflective of short covering ahead of the holiday in the US rather than strong economic fundamentals. 

GBP – The pound neared a one-week high in early trading after the BoE released the minutes from its previous meeting.  While the voting record (8 to 1 for no change in policies) was widely expected, the Bank’s projections for British economic growth in ’13 and ’14 were encouraging at +1.3% and +2.0% respectively.

JPY – The yen extended its recent slide, falling to a fresh eight-month low against both the USD and EUR as rising stocks weighs on demand for its relative safety.  Japanese politicians determined to help the nation’s exporters regain competitiveness have also continued with interventionist rhetoric. 

Commodity Currencies – The commodity linked currencies are generally lower today as raw good prices remain under pressure.  The CAD is flat as the falling price of oil – Canada’s main export – has largely been offset by the positive economic data out of the US – Canada’s primary trading partner.  Similarly, the AUD is lower as investors remain concerned with the overall pace of global economic growth.


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