Mike Paterson’s Daily Forex Brief
The Euro staged another rally yesterday as news emerged (again) that the ECB will reportedly embark on large-scale bond purchases after Spain submits its EFSF request.
This, along with a further package of crisis measures to be announced, is not exactly breaking news but it was enough yesterday, on a day that saw a further slice of soft US data, to turn sentiment around yet again for the umpteenth time this week.
EURUSD, having held the strong 1.2240 support line, has now rallied as high as 1.2375 with EURGBP climbing back through the 0.7850 (1.2739) pivot to so far hit 0.7871 (1.2703) after yesterday falling as low as 0.7812 (GBPEUR up to 1.2801).
Adding to this renewed EURO demand has been a continuation of the surge in EURAUD with traders being forced to stop themselves out on short positions and so far we’ve seen a high of 1.1845, driving AUDUSD down to 1.0435 and GBPAUD back up through 1.5000. Fears of an accelerating slowdown in China and also its gold purchases has given a few wobbles again to the Aussie $.
The Pound has enjoyed an indifferent 24 hours with its losses versus the Euro and Swiss Franc but with GBPUSD holding above 1.5700 and climbing generally against the commodity related currencies.
Little in the way of data today but you don’t need me to repeat myself about Fridays and what the end of week trading can bring so get your orders in on both sides as I’ve been chanting for some time now. We’re in range-trading mode and it’s going to be September before we get any real direction, if at all.
Which is something England’s bowlers will need early doors today to get rid of the SA tail and keep their total under 300 from the current position of 262-7. It was a good day for the home side but they’ve got to gain the advantage now if we’re to set up the all important victory.
And with Southend United opening up their League 2 campaign tomorrow can it really be that time again for the Friday rallying call? Of course it is, so Come On You Mighty Shrimpers!!!!
Back up to Lords today but will be on my mobile should anyone need me.
Interbank Rates at 07:45 BST
Today’s Data: BST
09.00-EU – Eurozone Trade Balance/Current Account
14.55-US – Michigan Consumer Sentiment
15.00-US – CB Leading Index
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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 firstname.lastname@example.org
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.