Yen crosses were the focus overnight as the world equity markets gave back Wednesday's gains; traders continue to buy Yen against all major pairs putting a bit of upside pressure on the USD. However, the big news today is the surprise 1.5 BP cut in interest rates by the BOE. In the statement the BOE said that inflation pressures were dropping and that the need for stimulus was apparent.

The vote was probably unanimous but we won't know that until the minutes are released later in the month. Expecting to follow suit the ECB also cut rates this morning but the amount was less; traders were expecting a 50 BP cut and the bank cut by 50 BP despite late calls for 100 BP. Both EURO and GBP fell sharply on the news but recovered quickly suggesting that the news was probably factored in despite the size of the cuts.

Both pairs have fallen dramatically the past 2 months and analysts suggest that the move lower may have been overdone but warn that historically the USD rallies in the first few months of a new US president being in office. GBP high prints at 1.6035 in early New York after the rate announcement will likely be followed by higher pricing during the day. EURO fell to a low print at 1.2808 before bouncing hard to trade 1.2880; high prints remain at 1.2956 so far from European trading. USD/JPY is in a tight range today holding around the 98.50 area after posting a high print at 98.51 and lows at 97.55; traders note that offers are thick above the 100.00 area and the move higher early in the week may be the highs for the week as US data due out today and tomorrow offer little hope for a USD bullish surprise.

USD/CHF is also higher likely from softer Gold prices with high prints at 1.1756 overnight and currently trading around the 1.1700/10 area to start New York before falling back a bit to 1.1670 area at this writing. A surprise rate cut by the SNB had little effect on prices. USD/CAD is bouncing off key fib support from yesterday and is trading 1.1700 area this morning; high prints at 1.1756 with lows at 1.1569 making for the largest range on the board so far today. In my view, the election of Senator Obama is having little effect on the markets at this point as traders take the view that there is a lot of work to be done to resolve the financial crisis no matter who is on office; it is likely that the forces in effect will continue to pressure the USD near-term. Look for US data today to be USD-negative as well as Friday's data but it appears to be factored in.

Overnight Asia/Europe

• BOE and ECB cut rates, little reaction to the news
• Yen crosses in focus as traders buy Yen
• USD range bound overnight

Today's Economic Reports
All times EASTERN (-5 GMT)

• 8:30am USD Prelim Nonfarm Productivity q/q
• 8:30am USD Prelim Unit Labor Costs q/q
• 8:30am USD Unemployment Claims
• 10:35am USD Natural Gas Storage
• 7:00pm USD FOMC Member Warsh Speaks

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

• 8:30am USD Non-Farm Employment Change
• 8:30am USD Unemployment Rate
• 8:30am USD Average Hourly Earnings m/m
• 10:00am USD Pending Home Sales m/m
• 10:00am USD Wholesale Inventories m/m
• 3:00pm USD Consumer Credit m/m

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