Despite the looming holiday weekend, the price action in the NY session was nothing short of spectacular. Better than anticipated US economic data helped risky assets extend and stocks closed up 0.5% on the day. US jobless claims sank to just 466K from 505K on the back of some rather aggressive seasonal factors (because of the Thanksgiving Day holiday). The rub here is that we will likely see a rebound back towards the 500K mark next week. New home sales blew away expectations and rose 6.2% in October as many buyers expected the first-time homebuyer tax credit to expire in late November (this has recently been extended). Furthermore, the University of Michigan showed an improvement in November consumer confidence as the index rose to 67.4 from a 66.0 preliminary read.
The better tone to risk weighed on the US dollar and the currency dropped more than -1.1% against the majors. EUR/USD took out the 2009 highs and then broke the 1.51 level in a big way. Stops were taken out and the pair traded near 1.5135/40 as we write. Cable was lower in early NY trading but eventually recovered towards the 1.6710 zone after an open near 1.6700. USD/JPY came extremely close to testing the 2009 lows, grinding down to just above the 87.20 area before recovering a touch to 87.30/35. Lower US yields on the back of another stellar auction put pressure on the pair. Gold was once again the star of the session as the precious metal was on its way to a +$20 day and near the $1190 area at the moment. We wrote late last week that the path of least resistance is $1200 and this has played out a lot sooner than we had anticipated.