Mike Paterson’s daily Forex brief
Yesterday saw the Euro and stock markets show some form of recovery on the news/rumour that the central banks were going to add liquidity in a co-ordinated fashion as they've done before in this crisis, but there's been no confirmation and therefore no follow-through.
EURUSD did rally up to 1.2620 but dropped again afterwards to test recent lows for 2012 around 1.2520 after the latest Greek poll showed an overwhelming vote against the austerity packages for EZ bailout funds (shock), only to find a few buyers around that level and has headed back up to 1.2580. EURGBP had another look below 0.8000 but couldn't get past 0.7995 again this time and has since rallied in line with EURUSD to sit once again around 0.8021 (GBPEUR 1.2465)
The Euro has also been aided by large buying of EURCHF in NY and Asia as rumours went around that the SNB were planning to make a statement this weekend announcing among other things a tax on Swiss Franc deposits. After weeks of hanging in a 1.2007-17 range we flew to 1.2075 before falling back to 1.2025. Which says a lot and yet nothing! It's unlikely that the Swiss would impose such a tax but these are unprecedented times, and traders are easily spooked.
GBPUSD hasn't been able to get back above 1.5700 but has found buyers around 1.5650 again and overall the Pound remains a mixed bag with some of the recent gloss definitely dispatched after yesterday's downward GDP revision, the IMF speaking in tongues but basically saying we were in bit of a pickle, and Mr Cameron's increasing exposure to some nasty politically poisonous arrows. None of which will surprise any of my regular readers.
The FTSE has seen a recovery to 5386 after clinging on to 5300 support lines but is capping again as I type, while Gold is poodling around $1560 after its recent sharp drop.
Little in the way of data today and with the sun shining in the UK, and the States on holiday on Monday there isn't going to be a lot of appetite from traders to get involved. So we should expect a scrappy end to a truly scrappy and depressing week.
Which will suit me fine as I sit here listening to the wonderful banter of Test Match Special as England and the West Indies begin the 2nd Test at Trent Bridge. After KP's outburst over the ability of former England player Nick Knight to commentate for a TV station that I'd rather not give credit to here but it rhymes, appropriately enough, with lie, he could do a lot worse than do what my dear old dad used to do and turn the sound down and have TMS through the headphones. That is, of course, until he too preferred a good rant, justifiably like KP, at that TV station's assembled commentary team!
Tomorrow Uncle Roy rolls out his first selection as England's new football supremo while competing with new kid on the block Engelbert Humperdinck as the UK's inspired (you sure? Ed) contender for the Eurovision song contest. Definitely time to head out to the sanctuary of my no-TV local for a couple of pints!
And finally, a Happy 16th Birthday to my darling daughter Lily. Time for me to feel very old again!
Have a great, and hopefully sunny, week-end everyone.
Interbank Rates 08:42 BST
Today’s Data: BST
15.00-US- Michigan Consumer Sentiment
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