Mike Paterson’s daily Forex brief

A little bit down, a little bit up and a little bit down again for the Euro as Greece, and the Troika (European Commission, ECB and IMF) still try to hammer out some sort of deal.

Greek PM Papademos has a battle on his hands to sell any more austerity packages to his country, whose unions are coming out again with a General Strike in protest. While he and his party chiefs have agreed to make further cuts this year equal to 1.5% of GDP, they have yet to close gaps over measures demanded by creditors for a €130 billion rescue. German Chancellor Merkel said “time is running out”, while unions derided the conditions as “blackmail”.

The Euro has continued to tease and remains firmly entrenched in recent ranges still, with buyers around on EURUSD at 1.3060 again and sellers toward 1.3200. This morning China has been seen selling around 1.3130 and 1.3160 and we’re currently at 1.3141.

EURGBP couldn’t get any lower on yesterday’s dip and has since bounced back to 0.8320 (GBPEUR 1.2020) before capping. GBPUSD has traded tightly above 1.5800 for the most part but the Pound overall has lost a little ground against most others.

The RBA left Australian interest rates on hold at 4.25% which came as a surprise to the markets who had expected a cut of 0.25%. The RBA cited stronger data from the US as the reason for staying on hold, and the Aussie $ marched yet higher again with AUDUSD hitting 1.0823 and GBPAUD trading down at 1.4612.

Highlight of this morning will be the speech from the SNB Chairman Jordan at 10.45 GMT. The big question is will he/they do any more than just reiterate the 1.20 EURCHF cap for the Swiss Franc or will they even raise it higher…..Talk is that the SNB have increased their credit lines at most of their major dealing banks so it figures they will do nothing more than talk a good book and then try and defend any reverse reaction. We will know soon enough and EURCHF currently sits at 1.2072.

This afternoon US Fed Chairman Bernanke testifies again but we can’t expect him to deviate from recent policy talk.

Markets will then start to focus on the UK and ECB interest rate decisions on Thursday with many pundits suggesting further QE from the Old Lady and 0.25% rate cut from the ECB.

Should make it an interesting week, at least a lot more so than following any English cricket right now………

Today’s Data: GMT

10.45–CH–SNB Chairman Jordan speaks

11.00-EU- German Industrial Production

15.00-US- Fed Chairman Bernanke testifies

Interbank Rates:

	Current	High	Low
EURUSD	1.3141	1.3168	1.3089
GBPUSD	1.5819	1.5833	1.5792
EURGBP	0.8308	0.832	0.8282
GBPEUR	1.2033	1.2075	1.2017
GBPCHF	1.4529	1.4566	1.4499
GBPAUD	1.4649	1.4775	1.4612
EURCHF	1.2071	1.2077	1.2057
GBPHKD	12.2644	12.2753	12.2435
EURHKD	10.1923	10.2148	10.1395
GBPZAR	11.9475	12.0175	11.8951
USDJPY	76.75	76.79	76.52
GBPCZK	30.0021	30.1552	29.9538

Agree or disagree? Then please leave a comment in the box below or contact me by e-mail.

Mike ‘Oscar’ Paterson has been in the Forex trenches for nearly three decades working as a senior Spot trader in London at UBS, Chief Dealer FX at the State Bank of Victoria and in charge of Spot CHF at Credit Suisse with a daily turnover in excess of $1.5 billion. Mike now works as an independent consultant providing a fully bespoke service to the corporate and private sectors in physical FX delivery as well as guiding those who wish to improve their currency trading. Mike also presents seminars and workshops and writes for a number of publications.

To contact Mike please call +0044 (0) 1732 700383 or email mike.paterson@economicvoice.com

The views expressed above are those of the author and should not be taken as investment advice. MSP Foreign Exchange Services will have no liability for, or to, any persons executing trades based on the content above.

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------ Other articles of interest ------

• The Euro takes another hit as Greece goes back to the polling stations-UK waits on BOE inflation report
• Markets still wait on Greece and key US data this afternoon

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This entry was posted on Tuesday, February 7th, 2012 at 10:46 am and is filed under Business & Finance, News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.