Mike Paterson’s daily Forex brief

Last night the US Federal Reserve left interest rates on hold as I reported but since then the G20 leaders have been assembling in Cannes and not wasted any time laying into Greece, with Merkel and Sarkozy insisting that PM Papandreou make the people vote Yes in the forthcoming referendum or else face the consequences. Siimmmples!

This continuing battle gave the Euro a shove lower with EURUSD finding a base again around 1.3655 with sovereign names buying a few in the dips but with the ECB back in buying Italian bonds we've seen a move back 1.3730 with plenty of sellers are lining up above 1.3750 so I'm told. Papandreou has called an emergency cabinet meeting within the next hour ahead of the confidence vote tomorrow with rumours going around that he will resign.

EURCHF has had another dip lower to test the supposedly strong support around 1.2125 and is having another go as I type. Talk remains that the SNB have an interest there. All will be revealed.

GBPUSD has rallied along with EURUSD after dipping to 1.5876 but it too has plenty of sellers above 1.5950. Across the board the Pound is having a mixed time of it losing a bit of ground against the Euro to 0.8624 (GBPEUR 1.1590) but faring ok still against the weaker commodity currencies.

Daily Forex Brief2Today sees the start of a new era with the first ECB interest rate meeting chaired by new president Mario Drahgi formerly head of the Bank of Italy. Somewhat ironic that, as attention focuses sharply on his country's woes (Greece aside of course), he should be steering the ECB through this difficult time with a light touch on the tiller a definite must. There is talk that we will get a cut today of 0.25% with some even going for 0.5% but that might seem a little like helping himself to the sweetie jars in his own shop given Italy's dire borrowing cost situation.

His predecessor Jean- Claude Trichet became very adept at playing a straight bat at the all important press conference afterwards and it will be equally as important for Drahgi to do likewise if we are not to return to the days of "Dim" Wim Duisenberg and the chaos he created with less than clever responses.

So an interesting day ahead (which one isn't these days?) as the G20 try and figure out a way to re-gain some credibility let alone find a solution, and the ECB interest rate decision, with UK BOE Governor King chipping in as I type.

Never a dull moment eh?

Today's Data:

Live Economic Calendar Powered by Forexpros – The Leading Financial Portal

Weekly Economic CalendarHERE

Interbank Rates as of 08:38 BST

Current Price

Overnight

High

Low

EUR/USD

1.3750

1.3761

1.3655

GBP/USD

1.5938

1.5960

1.5876

EUR/GBP

0.8622

0.8630

0.8595

GBP/EUR

1.1590

1.1635

1.1586

GBP/CHF

1.4074

1.4134

1.4068

GBP/AUD

1.5495

1.5575

1.5408

EUR/CHF

1.2140

1.2155

1.2129

GBP/HKD

12.3567

12.3737

12.3086

EUR/HKD

10.5615

10.5384

10.5236

GBP/ZAR

12.7546

12.8730

12.6991

GBP/CZK

2.9143

2.9337

2.8637

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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