Mike Paterson’s Daily Forex Brief
After a couple of days in the dumps we’ve seen a few US $ buyers re-emerge after poor Eurozone GDP data yesterday with particular concern that Germany was starting to feel the strain too. In addition US Retail Sales came in above forecasts and traders were forced to concede on recent moves.
Cue a reversal in EURUSD down to 1.2316Â ( I did say yesterday we were as likely to see a move down below 1.2300 as testing the next resistance above 1.2400 ), with GBPUSD lower to 1.5660 and AUDUSD down 100 tics to 1.0454 exacerbated by more negative news from China overnight.
EURGBP had a brief attempt at breaking 0.7900 but as EURUSD turned lower it was all change as traders gave up and scrambled out. So far support at 0.7850 has held (GBPEUR resistance 1.2740) but its coin-flip time again from here.
BOE MPC Minutes just released show a 9-0 vote last time to keep interest rates and QE unchanged but does reveal that the level of EURGBP was giving cause for concern re net exports to the Eurozone. Not much they can do about that though in my book without triggering a collapse in the Pound and creating more import-driven inflation. Hard place and rock are words that spring to mind.
UK unemployment data also just out shows the number of people out of work fell by 46,000 to 2.56 million in the three months to June. The unemployment rate fell to 8.0% in the period, down from 8.2% in the previous quarter while the number of people claiming Jobseeker's Allowance fell by 5,900 to 1.59 million in July. No doubt some sort of Olympic effect kicking in here particularly on Londoners.
More data from the US out this afternoon to keep us on our toes (see table below).
And regular readers of this blog will no doubt be as excited as I am by the news that Southend United aka The Shrimpers, begin their League 2 programme with a home match this Saturday. Stand by for the thrills and spills of real football at the sharp end to cure all those post-Olympic blues!
Interbank Rates at 08:53 BST
Today’s Data: BST
09.30-UK – Claimant Count Change / Unemployment Rate / BOE’s MPC Minutes
10.00-EU – Eurozone GDP / German ZEW Economic Sentiment / Eurozone Industrial Production
13.30-US – CPI / NY Empire State Manufacturing Index
14.00-US – TIC Long Term Transactions
14.15-US – Capacity Utilization
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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.