Mike Paterson’s daily Forex brief
Numpty Euro sat on a wall, Numpty Euro was due for a fall, and so it proved after I signed off yesterday after talking of influential data likely to make an impact as well as BIS selling Euros for the SNB that I also mentioned.
Eurozone Unemployment came in weaker than expected which was no great surprise, but the number of German jobless up by 19,000 certainly was. Add to this poor Manufacturing PMI (Purchasing Managers Index) for Italy, Spain, and Greece dragging the Eurozone figure down to 45.9, the lowest reading since June 2009 and we saw the Euro under pressure once again.
EURUSD fell below 1.3200 despite decent buying interest and we’ve since been down to test strong support around 1.3120.
EURGBP has been down to 22-month lows of 0.8113 following the poor data, but bids have surfaced ahead of a barrier at 0.8100 which have so far curbed further falls.
A break of the 0.8100 barrier points down to 0.8065/70 (0.8067 June 29th 2010 low) with talk of very large sell stops below through 0.8060.
Lots of talk doing the rounds ahead of today’s ECB interest rate meeting, with many leading figures not ruling out more LTRO (Long Term Refinancing Operations).
Spain is seen as a particular risk but hawkish members want governments to act rather than the ECB. It’s not beyond the realms of possibility to see them cut rates today and at the very least we should expect dovish tones from President Draghi at the 13.30 BST press conference.
The Pound has found a few supporters again for the moment despite an honest appraisal of past mistakes by BOE Governor Mervyn King. Seems like GBP will avoid any immediate further falls all the while the attention remains elsewhere, but there is little doubt that concerns will be building in Whitehall and Threadneedle Street that any continued Pound strength will be doing us no favours what so ever.
UK Services PMI is up at 09.30 BST and may well cause a ripple or two ahead of the ECB decision at midday.
Meanwhile, Ronnie O’Sullivan is in imperious form at The Crucible and ‘Arry accepts that the FA will never come calling. I think he knew that from the start…………..
09.30-UK- Services PMI
12.45-EU- ECB Interest Rate Decision
13.30-EU- ECB Press Conference
13.30-US- Weekly Jobless Claims 15.00- US- ISM Non-Manufacturing Index
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