Mike Paterson’s daily Forex brief

And the beat goes on………..

More of the same disappointments in the past 24 hours and we've seen EURUSD drop 200 points from this time yesterday to 1.3163 and GBPUSD following down to 1.5420, albeit a tad more slowly given the continuing sell interest in EURGBP which has now broken down through strong support at 0.8550 (GBPEUR 1.1695).Talk out there of good size bids around 0.8530 and 0.8500 from where we bounced up last month and this may well soak up the downside Euro pressure but there are still some sellers in the rallies while EURUSD keeps falling. I'm hearing also though that there are a few bids around in GBPUSD at 1.5370.

Adding to this bearish sentiment, quite apart from the EZ Finance Ministers meeting once again producing absolutely nothing, is a release this morning from US ratings agency S&P saying that the Eurozone faces a double-dip recession, even though I reckon they'd settle for that right now as a worst case scenario! Either way the release was enough to drive EURUSD down through strong support at 1.3200.

The market is still awaiting confirmation that the first tranche of EUR 8.5 billion aid to Greece has been signed off, but Euro Group head Juncker said that it will be another 6 weeks before the Troika report is ready. The Belgian Finance Minister has said that Greece has enough money to keep going until mid-November, so presumably they will continue to avoid default for now.

Overall the Pound continues to hold its own in these unprecedented times, edging ever higher against the commodity currencies with GBPAUD now through 1.6300 following the RBA's decision to keep interest rates on hold but suggesting that a cut could be on the way next month with inflation fears receding.

There continues to be little out there to give any cheer to these markets and we've seen Gold edge higher and stocks once again under pressure with the FTSE trading at 4935 as I type.

Little in the way of data today but we have ECB President Trichet and Fed Chairman Bernanke speaking this afternoon and traders will be paying close attention while starting to focus on Thursday's interest rate decisions from the BOE and ECB.

Just hearing Asian sovereign name buying GBPUSD around 1.5400 and Middle East names buying USDCHF around 0.9180.

Another scrappy day ahead and I'm off to London for business meetings. Feel free to contact me on my mobile though as always.

Today's Data:


Live Economic Calendar Powered by Forexpros – The Leading Financial Portal

Weekly Economic CalendarHERE

Interbank Rates as of 08.28 BST

Current Price

Overnight

High

Low

EUR/USD

1.3166

1.3227

1.3163

GBP/USD

1.5427

1.5467

1.5420

EUR/GBP

0.8542

0.8559

0.8538

GBP/EUR

1.1707

1.1712

1.1682

GBP/CHF

1.4208

1.4229

1.4182

GBP/AUD

1.6295

1.6336

1.6173

EUR/CHF

1.2137

1.2156

1.2125

GBP/HKD

11.9605

11.9916

11.9552

GBP/ZAR

12.7536

12.8295

12.6618

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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