The USD continued to advance today against the majors with the exception of the Yen; making new highs in New York trade into the end of day after the London fix. Traders were expecting potential for more month-end USD buying although not on the scale seen last week and with weaker energy and equities the USD firmed all day.

Finding stops below Friday's lows the GBP and EURO both slide to session lows amid light volumes as has been the case; low prints in Cable at 1.5779 after breaching the 1.6000 psychological level with more losses due on follow through. Low prints in EURO were more subdued holding above the 1.2580 area with low prints at 1.2595 before staging a modest rebound to the 1.2640/50 area. Traders report stops helping to drive trade in the rate but also note weaker energy. Both pairs are under interest rate watch as both Central Banks meet this week with cuts across the board expected.

Some analysts have the BOE cutting a full 100 BP but a 50 BP cut is likely factored in to current pricing suggesting that a 50 BP cut will disappoint the market into the end of the week. Not so well anticipated in the ECB cut with most analysts calling for a 50 BP cut but given Trichet's hawkish rhetoric a 25 BP cut is more likely leaving the EURO/USD differential favoring a firm EURO for the month. Not so clear is what the Fed will do at the December meeting where another 50 BP cut is rumored.

Despite all the potential rate moves today's US data was decidedly bearish leaving more underlying fundamentals the USD will have to eventually price in. PMI was down and so was Construction spending although both numbers were better than expected which might have provided a bit of upside support.

USD/JPY held to established overnight ranges leaving the 99.66 high print unchallenged today. Cross spreaders appear willing to buy Yen to start the week but the rate is firm into the end of day around the 99.00 area.

USD/CHF rallied to the 1.1700 handle for a high print at 1.1750 before backing off as stops above the 1.1720 area get triggered. The rate is now back to the earlier highs and due for a correction lower. Aggressive traders can look to sell the rate soon. Looking ahead to tomorrow the US Presidential election will dominate trader interest. Analysts are divided as to near-term direction depending on who wins; look for more two-way action overnight with an early USD rally in Asia overnight.

Today's US Dollar Trading

•           Japan closed for minor holiday
•           US data shows recession potential growing
•           USD holds gains into the close

Overnight Preview

•           Look for some follow-on USD buying
•           Two-way action likely on election day

Looking Ahead to Tuesday
All times EASTERN (-5 GMT)

•           10:00am USD Factory Orders m/m
•           All Day USD Presidential Election
•           10:45am USD FOMC Member Fisher Speaks

Forex Analysis by Jason Alan Jankovsky at ForexPros.com. For more details about Forex Trading and Tips for decent earnings through Forex Trading, Please check http://www.forexpros.com