Mike Paterson’s daily Forex brief

Crisis? What crisis?!!

Despite all the rhetoric, column inches and airtime given to the Eurozone crisis the Euro continues to consolidate. Which may have something to do with talk that the BRIC countries (Brazil, Russia, India, China) are holding 3 trillion Euros in FX reserves and may consider investing more of that in PIIGS debt (Portugal, Italy, Ireland, Greece and Spain) to shore things up and, err, protect their huge interest for the Euro not to go much lower.It's not a question of wanting to, more of having to.

I've talked about this many times before but it's always good to have numbers to back up the point of view! I'm not saying that the Euro won't/can't go any lower but it's important to understand that with this level of vested interest a lot of fundamental arguments go straight out the window.

Anyhow, EURUSD is testing the next resistance line at 1.3800, EURGBP has broken up through 0.8700 (GBPEUR down through 1.1500) and is up to 0.8730 (1.1460) as I type. EURJPY is finding a base after falling to 10 year lows and EURCHF has moved higher again after the SNB this morning left interest rates unchanged and reiterated their commitment to the 1.20  mark and said even that was too low. EURCHF has moved up to 1.2088 from 1.2027 just when many traders were looking to test the SNB's resolve.

The Pound still looks like it needs a few friends after some more horrible jobs news yesterday and GBPUSD is struggling to get back over 1.5800 as well as losing ground to the Euro. Data out this morning (retail sales) will have short term impact.

And there's a raft of data from the US this afternoon ( see table below ) as well as Fed Chairman Bernanke stepping to the podium, so attention will shift to our friends across the pond and we can see just how much of a mess they're in too. Kinda rich for Obama to criticize the Eurozone for not getting its house in order methinks.

Busy day ahead folks!

Today's Data:

Weekly Economic CalendarHERE

Interbank Rates as of 08.38 BST

Current Price

Overnight

High

Low

EUR/USD

1.3768

1.3770

1.3703

GBP/USD

1.5766

1.5779

1.5730

EUR/GBP

0.8730

0.8734

0.8695

GBP/EUR

1.1450

1.1502

1.1446

GBP/CHF

1.3827

1.3871

1.3800

GBP/AUD

1.5359

1.5479

1.5315

EUR/CHF

1.2077

1.2084

1.2034

GBP/HKD

12.2240

12.2340

12.1960

GBP/ZAR

11.6600

11.8000

11.6228

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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