Mike Paterson’s Daily Forex Brief

The geo-political unrest around the globe not withstanding we’ve also seen a correction in the Euro as I suggested we might.

Yes the Yen’s weakened too as the anti-Japan protests spread across China but this morning’s comments from the Spanish Deputy PM that they’re still considering the conditions of a bailout shows an element of stalling.

Spanish 10 year government bond yields have crept back above 6% and the Euro has had a little dip in European trading.

EURUSD has fallen through the 1.3100 and 1.3080 support lines triggering stop-loss selling to 1.3069 so far while EURGBP has capped for the moment and back to 0.8056. Support now comes in at 1.3050 on EURUSD while EURGBP should be finding bids around here and more lower down at 0.8030. Anticipate acceleration lower should these break.

GBPUSD has made the most of this move and found decent support above 1.6200 but overall the Pound is a mixed bag losing out to a recovering Swiss Franc (EURCHF has fallen again too) but making ground against the weakening Aussie $.

The risk-on sentiment has lost its shine for the moment and we’re seeing that reflected across the board, not only in currencies but also equities and Gold, which has fallen back further to $1752.

Today sees plenty of data to digest starting with UK inflation numbers at 09.30 BST, and followed by German and Eurozone ZEW Business Sentiment, and then the US Current Account this afternoon.

Forex Update-The Economic Voice Limited

Forex Update-The Economic Voice Limited

Should be an interesting day out there which may well set the tone for the rest of the week.

Meanwhile in the world of sport, the mighty Shrimpers travel to league leaders Gillingham tonight, whilst Man City take on Real Madrid in their own back yard. A seamless thread there eh? And, we have the start of the World T20 cricket tournament in Sri Lanka… Plenty to look forward to then on this sunny September day!

Interbank Rates at 08:38 BST

Currency Pair

Current

Overnight

High

Low

EUR/USD 1.3079 1.3122 1.3069
GBP/USD 1.6230 1.6262 1.6220
EUR/GBP 0.8059 0.8074 0.8056
GBP/EUR 1.2407 1.2415 1.2383
GBP/CHF 1.5045 1.5084 1.5031
GBP/AUD 1.5554 1.5567 1.5490
EUR/CHF 1.2117 1.2170 1.2118
GBP/HKD 12.5831 12.6079 12.5754
EUR/HKD 10.1419 10.1816 10.1291
GBP/ZAR 13.3875 13.4609 13.3565
USD/JPY 78.72 78.78 78.48
GBP/CZK 30.5818 30.6995 30.3692

Today’s Data: BST

09.30-UK – CPI / RPI / DCLG House Price Index 10.00-EU – Eurozone ZEW Economic Sentiment / German ZEW Economic Sentiment

13.30-US – Current Account

14.00-US – TIC Net Long Term Transactions

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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