This is a review of the elements likely to affect foreign exchange (Forex) trading in the European session:

Main headlines:

Fed Keeps Rates Low - Wall Street Journal

U.S. Earnings Fall Victim to Europe's Woes - Wall Street Journal

Draghi defends bond-buying programme - Financial Times

Spain speeds up 2013 funding, will cover regional needs - Reuters

France's Quiet Bank Rescues Top EU60 Billion With Peugeot Aid - Bloomberg

N.Z. Holds Benchmark Rate at 2.5% as Wheeler Term - Bloomberg

FOREX action

EUR: The euro is steadying across the board after yesterday's encouraging words from Mario Draghi. The ECB president appeared before the Bundestag to defend the OMT, its putative bond-buying programme, and said that deflation is a major concern rather than inflation. October flash PMI data in the Eurozone was worse than expected. Recent economic performance in the area could pave the way for a new rate cut to 0.50% from the current 0.75%. Today, the market will pay close attention to money supply aggregates in the common currency area. EUR-USD is trading a tad above 1.3000 after rebounding from the 1.2920 area. EUR-JPY is edging higher, to 104.20.

GBP: The sterling crosses are making gains as well. Cable has bounced back above 1.6000 while GBP-JPY is rallying towards 129.00. EUR-GBP trading is more subdued and the pair can now be found under 0.8100. Today the ONS will release the first estimate of third quarter GDP. Consensus forecasts point to a pick up in activity on a quarterly basis.

CHF: The Swiss franc is firming against the dollar. USD-CHF is now trading close to 0.9300. Meanwhile, EUR-CHF is still stuck in the 'new normal' which the 1.2100 level represents. The SNB is under less pressure to defend the 1.20 floor.

Nordics: The Swedish krona and the Norwegian kroner are showing mixed trading patterns. They are in the green against the dollar and more neutral versus the euro. EUR-SEK is moving forward toward the 8.695 resistance zone. EUR-NOK is still rallying after breaking the triangle technical pattern. We could see some profit taking in these two pairs in the next few days.

USD & JPY: The US dollar and, above all, the Japanese yen are in the red. As expected, the monthly FOMC meeting produced no changes after September's additional measures. The Fed kept its assessment unchanged and voted to continue to support the economy that is growing moderately. USD-JPY has managed to breach the 80 resistance zone.

CAD, AUD & NZD: The Kiwi leads the three dollars to the upside after the RBNZ decided to leave its official interest-rate at 2.50%. NZD-JPY is breaking the 65.705 resistance. The latest Chinese economic indicators prop the commodity currencies up.

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