Mike Paterson’s daily Forex brief
We’re seeing the Euro pause for breath a little after its previous rollercoaster 48 hours but concerns remain as Spanish and Italian bond yields touched 6.85% and 6.3% respectively. Anything above 6% is generally recognized to be unsustainable for debt repayment.
EURUSD has found some good buying interest on the dips and a few middle eastern sovereign names repeatedly dipping in their bucket to scoop some out in the lows toward 1.2470. We’ve seen the expected two-way business though and there is talk the SNB is selling some of its Euro’s again this morning around 1.2515.
EURGBP dipped as low as 0.8011 yesterday (GBPEUR up to 1.2482) as we saw continued buying interest in GBPUSD but with this pair failing to get through 1.5600 EURGBP has picked up a few buyers to return to its 0.8050 (1.2422) pivot point. If we can hold below 0.8060 we could well see another dip.
Overall the Pound has held recent gains with GBPCHF staying above 1.4900 and GBPAUD holding 1.5600 but both pairs are off their highs as rallies attract sellers still.
Focus in the markets now veers toward the Greek elections this Sunday. Will it be the day of reckoning? The beginning of the end? And what will be the contagion effect be on the ever worsening Spanish problems? We’re not going to get any answers before the week-end but we should expect lot’s of “what if” scenarios played out.
Stocks are steady and Gold is holding back above $1600 but with strong resistance lines around $1618 and $1643.
It’s all kicking off, literally, in the Euro 2012’s with Polish and Russian fans giving each other a history lesson in the streets, while in the UK it’s been revealed that for the opening ceremony we’re going to recreate a field in the Olympic stadium complete with a few sheep and cows and a rain machine at a cost of Â£27million.
Yep, the silly season is well and truly upon us………
Interbank Rates 08:43 BST
Today’s Data: BST
10.30- EU – Eurozone Industrial Production
13.30- US – PPI / Retail Sales
15.00- US – Business Inventories
22.00-NZ – RBNZ Interest Rate Decision
Agree or disagree? Then please leave a comment in the box below or contact me by e-mail.