Mike Paterson’s Daily Forex Brief

Last night ratings agency Moody’s downgraded French debt from AAA to AA1 and kept its negative outlook, meaning it could be downgraded again. Moody's blamed the risk of a Greek exit from the Euro, stalled economic growth and the chances that France will have to contribute to bailing out other countries.

The Euro had a little wobble but this news hadn’t been a complete surprise given France’s economic woes of late and, quite frankly, it will take something much more than this to move prices very far right now.

EURUSD did dip down toward support at 1.2770 but then popped back above 1.2800 but found sellers again around 1.2820 and has fallen back to 1.2780 this morning before finding a few buyers and we’re currently around 1.2800. Yawn……………..

EURGBP has had a similarly quiet 24 hours between 0.8015 and 0.8055 but mostly around 0.8040 (1.2438), while GBPUSD has found sellers at 1.5925 and buyers around 1.5885 …… Cue second yawn……….

So what can we expect today? More of the same sadly. All eyes remain on the Gaza strip as peace efforts escalate before Israel pushes the button that says “Ground Attack”, but there’s little else around to shake things up.

Forex Update-The Economic Voice Limited

Forex Update-The Economic Voice Limited

Fed Chairman Bernanke speaks later at 17.15 GMT and there’s more US housing data before that.

There’s more Champions League action tonight with the pick of the round being Chelsea at Juventus but that pales into insignificance lined up against the mighty Shrimpers’ trip to Wimbledon.

And is there a conspiracy out to there to nobble our cycling team? Now it’s the turn of Mark Cavendish to feel the full force of a braking car in front of him while training in Italy. If I were a member of the successful GB team I’d be feeling a little inclined to stay off the roads………….!

Interbank Rates at 08:40 BST

Currency Pair

Rates

EURUSD 1.2786
GBPUSD 1.5901
EURGBP 0.8038
GBPEUR 1.2435
GBPCHF 1.4981
GBPAUD 1.5292
EURCHF 1.2047
GBPHKD 12.3280
EURHKD 9.9140
GBPZAR 14.1066
USDJPY 81.22
GBPCZK 31.5900

Today’s Data: BST

13.30-US – Building Permits / Housing Starts

17.15-US – Fed Chairman Bernanke speaks

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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