Forex: Tuesday's review

The euro rose from near a two-week low against the dollar and yen after Chinese Vice Premier Wang Qishan said his nation had taken “concrete action” to help the European Union with its debt problems.
The euro gained on speculation investments by China, which holds a record $2.65 trillion in foreign-exchange reserves, will ease Europe’s sovereign fiscal crisis and boost the allure of assets in the region.
The single currency pared its gains and the Swiss franc strengthened after Moody’s Investors Service said it may cut Portugal’s credit rating. Portugal today said its budget deficit narrowed in the 11 months through November, the first annual reduction in the shortfall this year. The government plans to cut state workers’ wages and raise taxes to convince investors it can narrow the euro region’s fourth-biggest budget gap.
The Swiss currency gained as safe-heaven after Moody’s placed Portugal’s A1 long-term rating and Prime-1 short-term rating on review.
Canada’s currency, nicknamed the loonie, fell versus most of its 16 major peers. It pared losses as stocks and crude oil, the nation’s biggest export, rose. The consumer price index increased less than economists anticipated, bolstering bets that the central bank will keep interest rates on hold.
Consumer prices advanced 2 percent in November from a year earlier after a 2.4 percent gain in October, Statistics Canada said today in Ottawa. The median forecast of economists in a survey was for a 2.2 percent pace.

EUR/USD: the pair finished session in the field of $1,3100.

GBP/USD: on results of yesterday's session the pair decreased in around $1,5470.

USD/JPY: the pair bargained within the limits of Y83,50-Y83,90.


UK data includes the third estimate of Q3 GDP at 0930GMT, which comes along with Total Business Investment, Balance of payments data and also at the same time as the minutes of the latest MPC meeting from the
Bank of England. Expectations for the BoE minutes are for another three-way split of 1-7-1 with the MPC's Posen pushing for further QE and the MPC's Sentance seeking a 25bps rate hike. Traders may also look out
for any comments suggesting some MPC members believe the risks of inflation expectations becoming unhinged have risen in recent weeks. Also, there maybe comments related to potential contagion from the
Eurozone periphery debt problems.
US data starts at 1200GMT with the weekly MBA mortgage applications data, while the main US data starts at 1330GMT with the third release of Q3 GDP, where GDP is expected to be revised up to a 3.0% rate of growth
due to stronger PCE growth, a larger inventory build, and a narrower net export gap than previously estimated. The chain price index is forecast to be unrevised at +2.3%. Analysts have already turned their attention
to the fourth quarter. US data continues at 1500GMT, when the pace of existing home sales is expected to rise to a 4.75 million annual rate in November after dipping in October (NAR). At the same time, the FHFA Home
Price Index and also BLS Mass Layoffs data is due. The EIA weekly crude oil stocks data is due at 1530GMT.