The final minutes of the London session saw the most action today as the Bank of England rate cut educed a firm rally in GBP. The BOE cut rates by the expected -50 basis points but given the contentious estimates, which varied from no cut to a slash of -100 bps, the price action was highly anticipated. Nothing in the MPC report suggests the UK economy is likely to improve anytime soon and what resonated throughout was that the weaker pound of late is being viewed favorably. Indeed, the MPC noted how the weakness in GBP could help UK export activity. Despite the bleak outlook, however, GBP rallied in size.

GBP/USD soared about 270 points in the session and was sitting near 1.5240/50 just ahead of the start to NY trading. The 1.53 level proved a good barrier to upside on the try higher yesterday and we expect this to be critical resistance today as well. The focus shifts lower if we break below 1.5150/00 here. The price action in the other pairs was paltry as EUR/USD ended the session where it began, right around the 1.3570/80 area. USD/JPY was just a few clicks lower near 91.70 and EUR/JPY slipped a smidge towards the 124.40/50 zone.

Upcoming Economic Data Releases (NY Session) previous forecast

* 1/8 13:30 GMT US Initial Jobless Claims 3-Jan 492K 545K

* 1/8 13:30 GMT US Continuing Claims 27-Dec 4506K 4483K

* 1/8 15:00 GMT CA Ivey Purchasing Managers Index DEC 40.2 37.5

* 1/8 20:00 GMT US Consumer Credit NOV -$3.5B $0.0B

* 1/8 21:00 GMT US Fed's Hoenig Speaks on Infrastructure Spending