Mike Paterson’s daily Forex brief
Markets continue to lack any direction as traders try in vain to satisfy their normally voracious appetites with any scraps from around the table.
Yesterday’s brief feeding frenzy was caused by rising concerns over the lack of desire of Eurozone countries to step to the plate and deliver more bailout monies as directed by the G20 over the weekend. German Chancellor Merkel just about won the vote to pass the existing proposals for Greece but without a full coalition majority and then she went on to say, naturally enough, that she sees no need to increase the European “firewall”.
EURUSD traded down to 1.3360 but soon found the usual suspects scooping up in the dips and we’ve since seen a rally to 1.3463 before sellers emerging to take profit ahead of the 1.3500 barrier. EURGBP fell to lows of 0.8442 (GBPEUR 1.1845) but found the brakes being applied when EURUSD turned back up. Don’t forget it’s month–end tomorrow and we’ve already seen the start of the Euro buying for the UK’s monthly direct debit to the Eurozone.
Elsewhere the Pound has fuddled around going nowhere fast stuck firmly in the 1.58’s v the greenback but a tad weaker against most others.
The Yen found a few buyers on month-end profit taking but failed to find any further momentum when the 80.00 level held on USDJPY and we’ve moved steadily back up since with the Yen weakening once again.
Month–end flows should continue to dominate proceedings but we’ll keep an eye on the newswires as ever.
Data out today could also make an impact starting with the CBI Distributive Trades survey at 11.00 GMT.Talk out there this morning is for a stronger number and this has given the Pound a modicum of support. Should the data prove to be weaker than expected we’ll see some sort of GBP sell-off for sure.
Agree or disagree? Then please leave a comment in the box below or contact me by e-mail.