Mike Paterson’s daily Forex brief
We’ve seen a continuation of slow summer markets as traders remain away from their desks or indeed glued to the Olympics, but the Pound’s picked up a few buyers again despite the BOE’s gloomy growth forecasts yesterday.
A case of sell the rumour/buy the fact but something we often see in thin markets as the lack of follow-through prompts short-covering/profit taking and GBPUSD has climbed back up to a high of 1.5686 dragging the Pound up with it overall. Comments by BOE Governor Merv King that another 0.25% rate cut would have limited impact on growth also gave interest rate bulls a fillip.
EURGBP has fallen back below 0.7900 as EURUSD failed to stay above 1.2400 and indeed did dip to test those 1.2350 stops that I mentioned yesterday before rallying once more. So 1.2350-1.2450 covers that pair but we’re trading near the lows as I type. Will she, won’t she? We’ll find out soon enough perhaps with the ECB Monthly Report due out shortly.
The Aussie Employment data out overnight was slightly better than expected and we’ve seen AUDUSD up to breach the 1.0600 mark but has since fallen back on profit taking as once again lack of momentum gives rise for impatience.
UK Trade Balance data is out at 09.30 BST and given recent figures in the economy the market will not be looking for much to give cheer so to expect the unexpected might be the call.
Usain Bolt has made it through to the 200m final in his bid to replicate his 100/200m double from 4 years ago but it was a day of disappointment for many in the GB squad. But, hey ho, the sun is shining and even this cynic is not feeling so bad right now!
Interbank Rates 08:23 BST
Today’s Data: BST
09.00-EU – ECB Monthly Report
09.30-UK – Trade Balance
10.00-UK – CB Leading Index
13.30-US – Trade Balance / Weekly Jobless Claims
15.00-US – Wholesale Inventories
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 email@example.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.