Mike Paterson’s Daily Forex Brief
Mr. Feel-Good factor was soon running for the exits again on Friday as the poor Chicago PMI (Purchasing Managers Index) reading of 49.7 versus the 52.8 forecast was the lowest in three years, and added to the poor PMI data currently coming out from around the globe.
I’ve mentioned this indicator before and it’s now taking its turn in the sun as one of the must-know indicators. The PMI does exactly what it says on the tin, reflecting purchasing manager’s acquisition of goods and services in various sectors of the private sector.
In the US the Chicago PMI is held in high regard as it’s seen to mirror what’s going on elsewhere in the country in both manufacturing and non-manufacturing activity.
EURUSD had tried to rally again before the data but fell back through 1.2900 and looked at 1.2820 again before the buyers once again stepped in. We’ve been lower again to 1.2803 though in Asia before once again seeing a rally to 1.2878.
EURGBP’s anticipated two-way business on Friday gave a fairly convincing victory to the buyers with only a small blip down around the widely anticipated UK farm subsidy payment being fixed. Much would have been covered ahead of the event.
GBPUSD has also fallen through decent support lines at 1.6140 and has been as low as 1.6108 from the heady highs above 1.6250 on Thursday before finding a few buyers.
Eurozone September PMI data this morning has been a mixed bag with the Eurozone overall reading slightly better than expected, as was Germany’s, but France Manufacturing PMI was sharply down to 42.7 and the lowest for 41 months.
UK Manufacturing PMI just out has come in at 48.4 versus a final 49.6 reading for August and we’re seeing some GBP selling as I type.
It’s all adding up to showing the global economy grinding to halt, so fingers and toes will all be crossed that the central bank printing presses can come to the rescue.
Plenty of feel-good stuff in sport over the week-end though with the highlight (with no apology to our US readers!) undoubtedly last night’s remarkable victory by Europe in the Ryder Cup. Coming from 10-6 behind on the final day and needing 8 points from a possible 12 to retain the trophy they duly did so in one of the great sporting comeback occasions of all time.
You don’t even have to like golf to appreciate the scale of the achievement. It was simply sport at its absolute finest.
Have a good week out there.
Interbank Rates at 08:44 BST
Today’s Data: BST
09.30-UK – Manufacturing PMI / M4 Money Supply / Net Lending to Individuals / Mortgage Approvals-Lending
10.00-EU – Eurozone Unemployment
15.00-US – Construction Spending / ISM Manufacturing Index / Fed Chairman Bernanke speaks
05.30-AU – RBA Interest Rate Decision
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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.