• Merkel pushes for investor participation in bailouts from 2011, moved up from 2013
  • US weekly jobless claims fall to 407k from 441k
  • US durable good orders fall 3.3% in October; September revised to +5%
  • US personal income up 0.5%; spending up 0.4%; savings rate 5.7%
  • University of Michigan consumer sentiment 71.6 final in Nov from prelim 69.3
  • US new home sales fall 8.1% in October
  • US State Department calls North Korean attack a one-off; no signs war preparation under way
  • KC Fed manufacturing index 21 in November from 10 in October
  • Slovak FinMin: Risk of euro break up real
  • Ireland reveals four-year fiscal plan: EUR 6 bln savings in 2011, EUR 15 bln by 2014. Two-thirds spending cuts, one-third tax hikes
  • S&P: Irish budget assumptions too optimistic, additional downgrade possible within a month
  • Weber: Euro will survive; EU will pony up more cash if EUR 750 bln proves insufficient
  • US equities rally 1.5%; bond yields rise 14 bp to 2.92%

A very thin and volatile pre-Thanks giving session saw EUR/USD rally back to 1.3422 after the US posted very upbeat weekly jobless claims data only to run into very aggressive selling from an unloved US investment bank.

Prices ground lower for much of the US afternoon with market exceedingly thin. We fell as low as 1.3310 before stabilizing and head into the Wall Street close around 1.3325.

Today’s price action saw EUR/USD bounce hard off the 100-day moving average (1.3297) but hold below the 50% retracement of the August/November rally were selling accelerated yesterday. Consolidation between 1.3280 and 1.3435 looks likely over the holiday in the US tomorrow and into the weekend.

USD/JPY climbed back toward the 83.60s in afternoon trade, supported by a sharp rise in US yields and lessening fears that yesterday’s Korean skirmish will intensify.

Cable traded weak in the US today amid talk that large quantities of EUR/GBP was bought this morning, rumored to be linked to the UK’s bilateral loan to Ireland. We end the day at 1.5775.

Commodity currencies were well supported today by the lessening of risk aversion which saw stocks and commodities rebound sharply (CRB up 1.6%). Talk that Russia will increase its buying of CAD for reserve diversification helped the push the Loonie briefly above USD/CAD 1.01. AUD/USD ends at 0.9815 after squeezing as high as 0.9850 i late European trade.

A Happy Thanksgiving to all of our US readers and see you for an abbreviated session on Friday…