Mike Paterson’s Daily Forex Brief

We’ve seen a plethora of Euro-babble coming out over the past 24 hours but once again it’s month-end natural flows dominating but with a good slice of mergers/acquisitions requirement thrown in for good measure.

Talk has it that the Yen weakened again after this week’s bout of profit-taking due to a large USDJPY buy order in relation to the Softbank acquisition of Sprint, and we’ve seen the pair head all the way back up to 82.76.

And, as I’ve oft explained in these columns, the knock-on effect elsewhere is clear to be seen. USDJPY goes higher, dragging/forcing EURJPY higher, which in turn forces EURUSD higher and therefore, invariably all other Euro pairs too. Keep up at the back!

So EURUSD has gone from 1.2968 to 1.3028, and EURGBP from 0.8085 (1.2370) to 0.8116 (1.2321) with the aid of the usual Bundesbank month-end buying for UK EU payments before some month-end Dollar buying has brought a few Euro sellers in.

But this is being countered by more month-end USDJPY buying keeping that pair well supported in early European trading and so forcing more EURJPY buying and hence the cycle continues.

So we can expect more of the same today. It’s month-end and it’s Friday… What a potent combo. Get those orders in both sides because anything can and may indeed happen, against a still fraught Eurozone and uncertain UK outlook.

Forex Update-The Economic Voice Limited

Forex Update-The Economic Voice Limited

Meanwhile the mighty Shrimpers travel to Bury tomorrow in their quest for a 3rd Round place and more FA Cup heroics but the main sports story of the day must be former England cricket legend Andrew “Freddie” Flintoff’s professional boxing debut this evening at the age of 34 and against a dangerous US rookie.

The granting of a licence to Flintoff has aroused widespread criticism exacerbated by the fact that there’s a reality TV show being made following his progress. Whatever your view I just hope he doesn’t come to regret it like so many of his off-field antics over the years.

The guy deserves a better epitaph than that.

Have a great week-end all.

Interbank Rates at 08:47 BST

Currency Pair

Rates

EURUSD 1.3013
GBPUSD 1.6048
EURGBP 0.8107
GBPEUR 1.2330
GBPCHF 1.4852
GBPAUD 1.5396
EURCHF 1.2044
GBPHKD 12.4420
EURHKD 10.0908
GBPZAR 14.0692
USDJPY 82.67
GBPCZK 31.0467

Today’s Data: BST

10.00-EU – Eurozone CPI / Eurozone Unemployment

13.30-US – PCE Price Index / Personal Income/Spending

14.45-US – Chicago PMI

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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