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Late Session Selling

FOREX
FOREX: In contrast to the rest of the week, today's price action has been
largely event-driven, with both political factors and economic releases
influencing currency markets.
- EUR/USD fell to $1.1817 in early Asia following the Catalan election yesterday
which saw pro-independence parties gain a slim majority. This sentiment was
confirmed at the EU open with the EUR remaining weak and both Spanish bonds and
equities underperforming from the get-go.
- After trading quietly overnight, sterling gained following final revisions to
Q3 GDP which saw underlying strength in investment, production and construction
components (see MNI Main Wire at 0941GMT) and resulted in GBP/USD being bid up
to $1.3397 before paring.
- The passing of a stop-gap bill to avoid a government shutdown (funding
deadline moved to Jan19) has underpinned USD/JPY, which sits just below Y113.50
and the week's highs at Y113.64.
- While trading volumes today are expected to be thin, US personal income &
spending, durable goods and U of Michigan data will keep the dollar on its toes.
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com