Mike Paterson’s daily Forex brief

It really would appear that Xmas can’t come fast enough now. A quick glance at the rate table will tell you that we’ve seen little movement and while this usually doesn’t tell the whole story it really does on this occasion.

EURUSD has come to a grinding halt with buyers at 1.2980 and sellers around 1.3050, GBPUSD has been pinned in a 1.5500-50 range effectively and EURGBP has been 0.8375-0.8400 (GBPEUR 1.1904-1.1940).

EURCHF has struggled to fall much further after yesterday’s decision to leave the peg at 1.2000 as the SNB are rumoured to have been sniffing around at 1.2220 but we can still expect rallies to be sold for the moment.

I don’t expect this inactivity to continue given the thin liquidity we will have from here on in to year-end and we may yet still see a rally in the Euro as traders square up positions as I discussed earlier in the week, but the consensus remains that we will come lower eventually all the while the Eurozone fails to get its act together.

Next week’s EU meeting to draft the new Treaty proposal will have the UK in attendance in “observer” capacity but seemingly powerless to intervene. However, it may well be for that legal reasons to get a 27 nation agreement this might change. Frankly I don’t think any of us would be surprised by anything that happens out there right now huh?

FX Update

FX Update

The fall in the price of Gold this week is being attributed to the closing down of many under-performing hedge funds, which have been forced to liquidate profitable positions as I’ve mentioned here before. $1550 remains a tough level to crack though and there’s talk of plenty of buyers queuing up between there and $1500. We currently sit at $1589.

There is talk out there this morning that S&P will downgrade Italy and Spain at London’s close today but will leave France alone for the moment! Make of that rumour what you will and it’s had little impact thus far but may well curb any serious rally today.

Little in the way of data today and I’d imagine most traders can’t wait for the lunch bell to ring and then come back on Monday.

Probably the same for all of you out there as the festive season kicks in so I’ll wish you a good day and a great week-end and, of course, COME ON YOU SHRIMPERS!!!!

Today's Data:

10.00-EU- Eurozone Trade Balance

13.30-US- CPI

17.00-US- FOMC Member Fisher speaks

Interbank Rates as of 08:20 BST

Current Price

Overnight

High

Low

EUR/USD

1.3016

1.3045

1.3005

GBP/USD

1.5511

1.5545

1.5501

EUR/GBP

0.8395

0.8398

0.8380

GBP/EUR

1.1911

1.1936

1.1904

GBP/CHF

1.4580

1.4605

1.4557

GBP/AUD

1.5519

1.5647

1.5567

EUR/CHF

1.2238

1.2253

1.2222

GBP/HKD

12.0257

12.0520

12.0179

EUR/HKD

10.0962

10.1243

10.0686

GBP/ZAR

12.9676

13.0885

12.9552

USD/JPY

77.95

77.96

77.78

GBP/CZK

3.0224

3.0366

3.0182

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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