Mike Paterson’s daily Forex brief
The Pound has come in for a timely reality check following yesterday’s worse than expected provisional Q2 GDP data which came in at – 0.7 % and –0.8% year on year.
The Old Lady had previously warned us to expect a – 0.5% impact from the Jubilee holidays and bad weather and the Government were also quick to cite this as an excuse while still banging on about inherited debt and problems in the Eurozone and elsewhere.
Too right George, there’s a global decline going on out there but it doesn’t help to dig yourself into a big hole with no back-up and that appears to be the case now with any attempt to reduce our austerity measures as a sure fire signal that the revered and much-touted AAA status will disappear immediately.
Anyhow, we’ve seen the Pound come in for a bit of a slap understandably with GBPUSD falling sharply immediately after the data toward support lines around 1.5450 and EURGBP jump from 0.7775 (GBPEUR 1.2862) to 0.7840 (1.2755). The impact has been seen across the board with GBPAUD taking a big hit below 1.5000 and GBPCHF down 100 tics to 1.5290.
Whether we see any follow-through from here is debatable even if deserved given the lack-lustre range trading we’ve seen for a while now, but there’s definitely a marker in the sand even we do get an upward revision in the final GDP number.
Elsewhere the Euro has consolidated in tight ranges with EURUSD once again failing to break below 1.2050 and now testing the upper resistance levels around 1.2070. ECB President Draghi speaks at 10.30 BST and this afternoon we get the latest round of weekly US jobs data and Treasury Secretary Geithner is up again at 15.00 BST.
And finally, as London 2012 kicks off, literally, in Wales it all kicked off last night with the North Koreans as their female football team had to stare at their photos alongside a flag from? Yep, South Korea.
Onwards and upwards!
Interbank Rates 08:37 BST
Today’s Data: BST
10.30-EU – ECB President Draghi speaks
13.30-US – Weekly Jobless Claims / Durable Goods
15.00-US – Pending Home Sales / Treasury Sec Geithner speaks
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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 email@example.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.