The Fed’s Plosser is downplaying the dollar’s dive, saying it must be seen in the context of its rise during the crisis. Point taken, but don’t forget the dollar was at all-time lows on fears of a super-loose Fed as commodity markets bubbled, a situation almost exactly the same as the one in which we find ourselves today, except with a weakened First World economy. Bottom line: Neither the Fed nor the ECB sound too concerned about the dollar at present levels. 1.6000 seems t... Read Full Story

Traders who came into the New York session with square positions have had few opportunities to profit by jumping on the prevailing uptrend in EUR/USD today. The break of 1.5100 around 16:00 GMT produced less than 20 pips of upside if your execution was perfect. Given a rise through $1200 in gold and a 2% rise in oil plus a move solidly back above 1100 in the S&P, the lack of follow-through in EUR/USD has proved a bit frustrating. Read Full Story

Philly Fed’s Plosser is on the wires with something for bulls and bears alike. Risk bulls will like his view that the economy will grow three pct each of the next two years while bears will gravitate to his statement that the Fed may have to hike before unemployment falls to comfortable levels. He says timely withdrawal of stimulus is key for keeping inflation expectations stable. Read Full Story

Gold has just cleared the $1200 hurdle in the cash market as risk assets remain well underpinned as midday approaches in New York. Apparent lack of concern from the ECB over EUR stregth is the latest catalyst to a trade that was already on a roll. Read Full Story

Our friends at Market News have done it again..They run a monthly piece a day or two ahead of the ECB meeting with loads of juicy blind quotes from ECB officials. The latest: Spain, Italy, Greece worried about strong EUR but most not worried seriously until it reaches 1.60. As cheg noted, they hint that the upcoimg 1-year refi will be the last and that it may be indexed, not offered at fixed rates. EUR/USD has pushed up to 1.5115 on the perceived lack of ECB concern over the strong EUR. Mor... Read Full Story

The JP Morgan global manufacturing PMI to 53.6 in November from 54.4 in October. That’s not holding back the risk trade as EUR/USD overcomes the 1.5100 level. GBP/USD has broken above the 1.6630 level, triggering stops and EUR/GBP has seen another round of selling at the 16:00 GMT fixing. It retested session lows at 0.9075. Read Full Story

MPC member Posen says he thinks the recession is over but can’t be sure.The best forecast, he says is that we’ve hit bottom and will have pretty strong growth ahead. Inflation expectations are stable and he sees no reason for them to take off. Inflation-phobes would argue that quantitative ease and huge government outlays can’t help but spawn inflation… Cable trades near session highs, now at 1.6622. Stops are t 1.6630, dealers report. Read Full Story

If the market needs an excuse to rally, here’s one from the rotating head of the EU, Sweden’s Borg. He says EU bank exposures to Dubai seem to be on a reasonable level. He also claims to have the best backhand in the EU… Read Full Story

Risk appetites appear to be contracting a bit after the data as US equities lose about 0.3% of thier gains and trade up 0.8% on the session. EUR/USD is steady in the 1.5085 area and GBP/USD is consolidating gains above 1.6600. Read Full Story

Traders report a round of sales in USD/JPY from European banks. Prices have dipped into the high 89.50s so far and stops remain perched just below 86.50 we’re told. The BOJ action to ease modestly via 3-month fixed rate reports at 0.1% is seen by many as too little to spur the Japanese economy out of deflation. Read Full Story