Mike Paterson’s daily Forex brief
After socialist victories in France and Greece the repercussions on Franco-German relationship and fears of Greece not adhering to the conditions of their bailout, have seen the Euro taken a kicking over the weekend, while the seemingly Teflon-coated Pound has taken full advantage of the fall-out.
EURUSD has been down to 1.2955 in the aftermath in thin markets before finding the usual buyers and has since popped its head back above 1.3000 where we’ve seen the BIS buying a few in early European trading.
EURGBP has crashed through the strong 0.8100 barrier option support and also the next key support around 0.8060 to hit a low of 0.8035 (GBPEUR up to 1.2455) before stabilizing with EURUSD and is currently back above 0.8060 as I type.
Elsewhere the story is the same with Euro pairs losing heavily as markets fear the rising chances of a Eurozone collapse, and therefore that of the Euro itself, while investors flee to safe-havens and right now that means the Pound and US Dollar.
GBPAUD is up through 1.5900 and GBPCHF above 1.4900 to name but two pairs to benefit.
How long this scenario prevails for will depend on whether the UK government and PM Cameron can weather the current political storm but it seems nothing is going to blow them off course as far as economic policy is concerned.
These are strange days as I have oft said and the Best of a Bad Bunch trophy is currently being shared between two countries whom it would appear have been liberally applied with coats of Teflon.
It certainly doesn’t make me feel any better inside, and the next stage of the global economic downward spiral will be well beyond the control of any of us anyway, but the one thing the UK doesn’t need right now is a strengthening Pound.
Hats off to the Hammers who have made it to the Wembley play-offs and who could yet be playing in the Premier League next year. While the mighty Shrimpers missed out on automatic promotion by one point and now hopefully have our own date with destiny at Wembley. And could Mark Hughes yet still have the last laugh over City?
Congrats to Ronnie for a 4th World Snooker title. Love or loathe him, or the game, but there is no denying that in full flight the Rocket is every bit the supreme sportsman and entertainer as any other you may care to throw at me.
Have a good week out there.
13.30-EU- ECB President Draghi speaks
16.45-US- FOMC’s Fisher speaks
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