Mike Paterson’s Daily Forex Brief
It’s been another cagey 24 hours as traders await the details of the Spanish austerity package today, trying to second guess when Spain will finally put its hand out, while witnessing continuing unrest on the streets of Madrid.
Spanish bond yields have risen amidst the gloomy back drop of a potential sovereign debt downgrade, itchy feet in Catalonia, today’s announcement and tomorrow’s release of banking sector audits. Strap on the continuing talks between Greece and the Troika in a bid to work out the details of the â‚¬11.5 billion package of cuts needed by the deadline of October 8th and we have good reason to remain concerned.
EURUSD dipped to 1.2840 but ran into decent buying interest before rallying to 1.2890 where the sellers re-appeared. Talk now of good size sell orders between 1.2905-15.
GBPUSD has traded in a tight range again with bids lined up at 1.6140 and sellers coming in above 1.6200. EURGBP continues to attract two-way interest as month-end looms and has also dealt itself into a hole for the moment.
UK Current Account data this morning might shake things up a little but the spotlight continues to remain on the Eurozone and falling stock prices both sides of the pond.
My comment on Gold yesterday was timely as we saw a rapid sell-off down to $1,637 before finding fresh buyers and we’re now back up above $1,650. Still not a one-way ticket higher though by any means.
Nor indeed is England’s safe passage through to the T20 World Cup semis as they start their Super 8 stage today against West Indies. Our boys seem to perform better when their backs are up against the wall but they will have to improve, and quickly.
Interbank Rates at 08:42 BST
Today’s Data: BST
09.30-UK – Current Account / GDP Q2 (Final ) / Business Investment
13.30-US – Durable Goods / Weekly Jobless Claims
15.00-US – Pending Home Sales
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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.