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European stocks have turned lower and this is weighing on EUR/USD which has slipped to 1.5036 at writing. Earlier heard reports of some buy orders down at 1.5030 (not thought large), with stops parked just below.

EUR/GBP has rallied to .9126, with reports European central bank buying. We’ll take it that’s BUBA doing his month-end stuff.

EUR/GBP has bounced back smartly from a little dip to around .9085 area. We’re presently back up at .9105.

It’s interesting given Sean’s reports of decent-sized, fund repatriation, purchases to be done next month, maybe starting as early as later this week.  You’ve also got the usual BUBA month end purchase to bear in mind today.

JP Morgan and Bank of America are preparing to lend Hershey about $7 bn (£4.2 bn) to help it enter a bidding war on Cadbury.

Cable like EUR/USD is firmer at the start of the week, presently at 1.6560, underpinned by the feeling the Dubai situation can be contained.

Couple of overnight data releases, little mixed.  Hometrack price tracker rose +0.2% m/m in October, with the year on year number showing a -2.9% contraction, an improvement on the -4.2% decline seen the previous month.

Elsewhere, Gfk-NOP consumer confidence index fell 4 points in November, to -17 from previous -13.

Todays data:

09:30 GMT: UK mortgage approvals for October expected +57k, up from prevous +56.2k

09:30 GMT: Net consumer credit for October expected -0.2 bln

09:30 GMT: Net lending sec on dwelling expected 1.0 bln

09:30 GMT: M4 money supply for October (final)

BOE’s Adam Posen still sees possibility of a double-dip recession for UK and US and feels it’s too early for UK to exit QE programme.  Think he’s on the money there, and wouldn’t be at all surprised to see further QE down the pike.

BUBA expected to execute some month-end EUR/GBP purchases which could weigh on cable a little. We’ve also gotten reports of good-sized EUR/GBP purchases to go through in December, possibly starting this week, related to fund repatriation flows. Worth bearing in mind. The cross sits presently at .9085.

EUR/USD has opened firmer in Europe from where it closed out last week, presently up at 1.5050. The pairing has been supported by the growing feeling that the situation in Dubai can be contained, with Dubai’s neighbour Abu Dhabi offering support, albeit selective, and the U.A.E central bank offering regional banks emergency support.

Euro zone data due today:

07:45 GMT: French PPI for October expected +0.2% m/m, -7.3% y/y

10:00 GMT: Italian CPI for November expected +0.2% m/m, +0.8% y/y, EU harmonised +0.1% m/m, +0.8% y/y

10:00: GMT: Italian PPI for October expected +0.1% m/m, -6.0% y/y

10:00 GMT: Euro zone CPI for November expected +0.4% y/y

European stockmarkets expected to open moderately firmer.

Sell orders seen in EUR/USD up at 1.5080/85 and at 1.5100, stops just above there. Then more sell orders up at 1.5140/50, stops around 1.5170.

Many thanks Tajul for this:

“The USD has moved higher on the Nakheel announcement that Sukuks, which are Islamic financial certificates similar to bonds will be suspended … Dollar Index rising”

• Fears of another global credit crisis ease as help emerges for Dubai World
• Regional stockmarkets rally by 3% on average
• Gold was unchanged from the NY close at $1077/oz
• Fujii: Japan won’t intervene alone in FX markets
• AUD rallies with other majors, RBA maintains a very bullish view of the Australian economy
• Australian inflation 2.1% pa
• Japan’s manufacturing PMI falls 2 points to 52.3
• Japan’s October wages fall by 1.7%
• Bank of England: too early to exit easy monetary policy
• UK economic data: house prices up but consumer confidence down

Early interbank trade saw some big moves after the Dubai news eased some of the worries regarding another credit crisis. EUR/USD rallied above 1.50 and USD/JPY above 87 in very early trade before the retail markets opened. Most gaps were closed before the Tokyo open and since then has seen a gradual weakening in the USD across the board.

USD/JPY struggled to gain any traction above its previous low of 87.10 and despite three or four attempts, brought on by more verballing from Japanese authorities regarding the JPY level, the pair has slipped back as the day progressed. Range: 86.33/87.16.

JPY crosses have managed some muted gains but overall have been disappointing as many expected large gains after the big bounce on equity markets.

EUR/USD has traded in a 1.4962/1.5082 range and the market seems very unwilling to sit short for an extended period of time.

Cable fell early on the BoE statement and also on the poor consumer confidence number but has been dragged back higher by the EUR/USD.

AUD/USD has seen a .9097/.9197 range as shorts started to cover with both the inflation gauge and the Dubai news increasing the probability of a rate hike later this week.

Markets: Nikkei +2.4%, HK +3.3%, Kospi +2.6%.

Order books are fairly light which is no surprise as we head into December

• EUR/USD: sell orders 1.5070/80 and again at 1.5100, stops above 1.5100, sell orders 1.5140/50, heavy stops above 1.5165/70. Not much on downside until buy orders at 1.4920
• Cable: Decent sized sell orders around 1.6640/70
• USD/JPY: buy orders at 85.70 and 85.00. Trailing stops above 87.60 and 88.20.
• EUR/GBP: significant buying flows expected as week progresses

Regional bourses are up 3% on average with the Nikkei +2.4% and HK +3.4%. Gold is steady around its NY closing level of $1077/oz.

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