Mike Paterson’s Daily Forex Brief
Despite efforts by US Congress to meet on a Sunday we’re still no closer to a deal to avoid the fiscal cliff and any traders still at their desks have been extremely cautious as 2012 comes to an uncertain end.
The opposing factions meet again today but it seems unlikely that anything of substance will come of it with the best we can hope for being a flimsy band-aid until a more structured agreement can be reached.
Seems like kicking cans down the road in times of crisis has been a major play of 2012 with the Eurozone getting it down to a fine art but no one should be getting complacent. These temporary fixes might buy time to see how the guesswork pans out but that’s about all. If anyone thought the past twelve months have been tough then just wait for the next dozen.
EURUSD has seen a combination of year-end flows and position trimming to keep it in a tight range and we’re still 1.3150 – 1.3250, currently bang in the middle around 1.3200.
EURGBP has come down a tad more but failed to break the 0.8150 support (GBPEUR 1.2270 resistance) with GBPUSD heading back above 1.6125 and holding for the moment.
Overall the Pound remains a mixed bag but, despite PM Cameron’s message to the contrary yesterday, I can see 2013 providing a reality check as the spending cuts really start to dig in and make an impact and consumers struggle to keep pace with falling incomes and reserves.
Whatever your view there’s no denying we live in uncertain times and, whilst I’m a great advocate of positive thinking (I surprise myself sometimes!), there’s also a need to understand the difficulties that lay ahead and no amount of head in the sand avoidance will help any of us.
And talking of positive thinking I’m firmly believing that the Shrimpers can bounce back from defeat to take the spoils tomorrow against League 2 leaders Gillingham, currently experiencing difficult times of their own.
The world of cricket says a mixed farewell to former England skipper and all-rounder Tony Greig who’s died aged 66. True he may not have been everyone’s favourite son, and Kerry Packer’s World Series Cricket was met mostly with contempt at the time but he played a major part in its birth and thus paved the way for a whole new look at cricket and wages of its players. There is not a cricketer around today who doesn’t owe the guy a beer or two.
There’s no doubting it’s been a massive year of sport and we’ve had some magical moments to enjoy over the past 12 months. Let’s hope 2013 brings many more, whichever sport you follow.
Thanks for your company in 2012 and I wish you and yours a peaceful and prosperous 2013, as best we can manage it.
Let’s just be careful out there……………….
Interbank Rates at 08:53 BST
Today’s Data: BST
Nothing of note.
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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 firstname.lastname@example.org
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.