The Mike Paterson daily Forex brief

Stalemate at the FX corral as traders await developments in the EU/Greek bailout programme and US debt ceiling talks.


EU leaders meet today to put together the agenda for tomorrow's summit amongst a relative calm before the potential storm and the Euro is trading in a tight range after all the recent volatility. In all probability there will be little chance of an overall agreement, a view echoed by German Chancellor Merkel, but markets will definitely be expecting more than the continual barrage of EU rhetoric.

EURUSD is still struggling to make headway above 1.4200 with "real money" funds selling into the rallies but the pair continues to find the usual array of Asian Central Banks ( ACBs ) buying on the dips for USD diversification and EURGBP looks underpinned around 0.8800 ( GBPEUR 1.1360 ). Also just hearing that the BIS (Bank for International Settlements) has been in buying EURUSD this morning around 1.4160.

Stateside there are some better vibes coming from the debt ceiling talks and this has helped to curb recent USD falls as well as those in equity markets. Equally and for the same reason Gold has capped at yesterday's record highs around $1610 and is currently back down to $1592. One swallow though doesn't make the proverbial summer and we are still a long way from any real progress from both the Eurozone and US.

Should we get some degree of good news though then the spotlight might well fall back on the UK and this morning's release of the last BOE MPC Minutes could be a trigger point. There are two very definite camps out there re hiking interest rates and my thoughts on this are well documented. Expect some Pound volatility around 09.30 GMT as we learn who voted for what and when.

GBPUSD has fallen back through 1.6100 ahead of this release and I remain my usual bearish self on the Pound overall which has dropped again across the board in the last 24 hours after a period on the sidelines.

And finally, as they say, it would be remiss of me as someone who has always refused to take the Murdoch shilling and sign up to Sky – much to my detriment as a massive cricket and sports fan – not to express my delight at the current position the man finds himself in. Hopefully common sense will now finally prevail over the Lex Luther level of media control that he has been granted over the years. It's just a shame that those with vested interest couldn't see it earlier………

Anyhow with that off my chest it's back to the wonderful world of foreign exchange as we head into another day of currency thrills and spills……..

Today's Data:

09.30- UK- BOE MPC Meeting Minutes

15.00-US- Existing Home Sales

00.01-UK- Nationwide Consumer Confidence Survey

Interbank Rates as of 08.37 GMT

Current Price

Overnight

High

Low

EUR/USD

1.4165

1.4194

1.4132

GBP/USD

1.6077

1.6144

1.6074

EUR/GBP

0.8812

0.8814

0.8766

GBP/EUR

1.1350

1.1407

1.1345

GBP/CHF

1.3235

1.3309

1.3225

GBP/AUD

1.4982

1.5060

1.4972

EUR/CHF

1.1658

1.1695

1.1649

GBP/HKD

12.4640

12.5160

12.4620

GBP/ZAR

11.1157

11.2086

11.0456

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 including working with UBS, Credit Suisse and as head of the FX team at the State Bank of Victoria in London. Mike now works as an independent consultant providing a fully bespoke service to the corporate and private sectors as well as 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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