Mike Paterson’s daily Forex brief
Happy St Georges Day to all our English readers!
It’s been another mixed bag as the IMF announced commitments to new funding totalling â‚¬430 billion, designed in theory to help the global economy but naturally earmarked for the Eurozone who themselves have pledged â‚¬200 billion.
In a joint statement following the meeting in Washington, the IMF's International Monetary and Financial Committee (IMFC) and the G20 finance ministers and Central Bank governors said: "There are firm commitments to increase resources made available to the IMF by over $400bn in addition to the quota increase under the 2010 reform."
The UK is offering up Â£10 billion, or rather just under as anything over needs Parliamentary approval and he obviously doesn’t fancy his chances of getting it ratified.
Countries in the BRIC community are also pledging support but keeping their amounts under wraps until approved at home, but the US seems to be less than inclined to help out in this politically charged year.
Talking of which, President Nicolas Sarkozy faces an uphill struggle in the second round of the French presidential election, after coming second in yesterday’s first vote. He won only 27.1%, while his socialist rival Francois Hollande took 28.6%, the first time a sitting president has lost in first round. The two men will face each other in a second round of voting on 6 May with Hollande being firmly tipped to win.
The Euro has been up and down on these pieces of news with EURUSD touching 1.3222 before falling back to 1.3174 while EURGBP has stuck its head back above 0.8200 before falling back. Both pairs are dipping further as I type.
The Pound continues to enjoy its moment boosted further by today’s expected HSBC need to fund its quarterly dividend creating a GBP demand.
GBPUSD has been up to 1.6136 short of the key 1.6165 resistance but the pair is expected to remain supported for the moment at least.
GBPCHF has touched 1.4700 and GBPAUD continues to move higher again and looked at 1.5600 overnight.
Elsewhere it’s a similar picture. Big week coming up in terms of data and US interest rate decision which may give us more clues to medium term direction overall but for the moment it remains firmly in the balance.
As do the mighty Shrimpers automatic promotion chances after a fine 3-0 win and other results going our way. Play-offs are assured and only an eternal optimist would be looking at going up in the top 3 with two games to go but hey……. A great week-end of sport all round and congrats to all of you who completed the London Marathon. Have a terrific week out there.
09.00-EU- Eurozone Manufacturing & Services PMI
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