Mike Paterson’s Daily Forex Brief
Well, I said yesterday that the jury was still well and truly out in the wake of the US election result and so it proved as the feel-good factor dried up by late morning.
Following an overnight risk-on/US $ soft sentiment we saw equity markets fall back sharply and currency pairs soon followed led by EURUSD following warnings by ECB President Draghi that Germany was in danger of being taken down by the Eurozone mess.
EURUSD fell sharply, causing traders once again to turn positions in a rush and even as I type we’re seeing further losses down to 1.2725 dragging EURGBP back down to yesterday’s lows around 0.7970 ( GBPEUR up to 1.2542 ). EURJPY and EURAUD also lower. New reports just out that Spain will not be applying for a bail-out any time soon. Last night’s vote by the Greek parliament to approve the latest austerity measures gave the Euro only a temporary reprieve.
GBPUSD is down testing 1.5950 support lines and overall the Pound looks less than wanted despite its gains against the weakening Euro.
There’s more reason to be cautious today amidst Trade Balance data from either side of the pond as well as the little matter of interest rate and QE decisions from the BOE and ECB. We don’t expect to see any changes but the market will take nothing for granted and the ECB press conference will always throw up a spanner or two.
Nothing stopping British teams in the Champions League last night with Celtic earning the main plaudits for a famous victory over Barcelona, while also in the world of sport we have the somewhat bizarre/ironic story of Tour De France and Olympic Gold Medal winner Bradley Wiggins getting mowed down by a lady driver pulling out of a garage and suffering a couple of broken ribs for his troubles.
But we say good-bye today to Clive Dunn who has sadly passed away aged 92. Traders will do well to remember one of his famous catch-phrases in the much-loved Dad’s Army sitcom.
Interbank Rates at 08:47 BST
Today’s Data: BST
09.30-UK – Trade Balance
12.00-UK – BOE Interest Rate/QE Decision
12.45-EU – ECB Interest Rate Decision
13.30-EU – ECB Press Conference
13.30-US – Trade Balance / Weekly Jobless Claims
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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 email@example.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.