Mike Paterson’s Daily Forex Brief

Yesterday saw Standard & Poors cut Spain’s sovereign credit rating to BBB minus, just above junk status, citing a deepening recession that is limiting the government’s options to halt the slide.

The downgrade came with a negative outlook reflecting S&P’s view that there are major risks to economic growth and budgetary performance, along with a lack of clear direction in from Eurozone policy makers.

Whilst hardly a major surprise the news was enough to send the Euro lower across the board before finding the usual ACB buying interest but it’s still looking vulnerable to further attack.

EURUSD fell to support lines around 1.2825 again before the ACB’s came to the rescue and we’ve since seen a rally to 1.2892 but offers around 1.2900-20 remain. EURAUD again came under attack and we’ve been down to 1.2503 driving AUDUSD up through strong resistance at 1.0250 which has also caused GBPAUD to fall further through strong support lines around 1.5580-1.5600.

EURCHF fell through strong/SNB rumoured support at 1.2100 and forced longs to bail out all the way down to 1.2058.

EURGBP has fared a little better as concerns remain over the UK outlook only dipping to 0.8022 and since rallying to 0.8047.

GBPUSD also had a look below 1.6000 again but found buyers around the 1.5975 technical support lines again and has rallied as EURUSD found its base. Overall the Pound is lower and in my view the strategy must be to sell rallies still. No shocks there then!

Little in the way of data this morning but this afternoon sees US jobs figures and the latest Trade Balance. We’ll have plenty more rhetoric from the Eurozone to keep us on our toes though.

Forex Update-The Economic Voice Limited

Forex Update-The Economic Voice Limited

Damning news for cycling legend Lance Armstrong from the US Anti-Doping Agency who, despite Armstrong’s long- standing claims of his innocence, has produced startling new evidence to the contrary and have labelled him a “serial” cheat who led “the most successful doping programme the sport has even seen”. Information from 11 of Armstrong’s former team-mates would appear to back up the USADA’s recent decision to ban him for life and strip him of his seven Tour de France titles.

A sad day for sport in general if all the reports are indeed true and highlights the climate of high stakes and greed where athletes need to cheat, footballers to dive, and cricketers to take bribes.

Interbank Rates at 08:48 BST

Currency Pair

Current

Overnight

High

Low

EUR/USD 1.2884 1.2892 1.2825
GBP/USD 1.6021 1.6030 1.5983
EUR/GBP 0.8044 0.8047 0.8022
GBP/EUR 1.2431 1.2467 1.2427
GBP/CHF 1.5016 1.5061 1.5011
GBP/AUD 1.5570 1.5682 1.5564
EUR/CHF 1.2077 1.2097 1.2058
GBP/HKD 12.4211 12.4280 12.3916
EUR/HKD 9.9920 10.0009 9.9395
GBP/ZAR 13.8697 14.0257 13.8472
USD/JPY 78.03 78.23 77.94
GBP/CZK 31.0207 31.1996 30.9530

Today’s Data: BST

09.00-UK – ECB Monthly Report

13.30-US – Trade Balance / Weekly Jobless Claims

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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