Mike Paterson’s daily Forex brief

Another lively 24 hours in Forexland with a rally from the previous day’s lows as traders looked to square up given the lack of momentum from the previous day’s fall, but little headway made to the upside.

The Pound has definitely found a few sellers though this week and ends the year looking somewhat sorry for itself overall. No surprises there for my regular readers and I have yet to change my view that the worst is yet to come in the UK, and my mantra of sell GBP rallies still holds!

Granted, it has eventually made progress again towards the end of this year against the beleaguered Euro but still failed to make any new highs and spent most of the year very much mid-range. I think the market now understands that a Eurozone under pressure has its own calamitous effect on the UK, something I’ve been bleating on about all year.

EURGBP found itself on the march higher yesterday, due in no small part probably to the regular month end EU payment that I’ve mentioned oft before but we ran into large sell orders camped around 0.8425 (GBPEUR support 1.1870) and capped at 0.8423 before falling back in Asian trading.. We now have a 0.8350-8425 range for the moment it would appear.

The Euro itself of course remains under pressure. No denying that, and there’s an increasing school of thought that says we will see EURUSD fall to 1.15-1.20 this year, perhaps even lower. The Eurozone will continue to take up the front pages but its knock-on effect will impact elsewhere too.. The German Finance Minister this morning tells us that they will have the risk of contagion under control over the next 12 months. Really?? The jury remains well and truly out still and this writer remains consistent in his view of the past few years that things have to get worse before they get better.

Fx Update

Fx Update

Gold found some support around $1525 and has clawed its way back above $1550 for the moment but George Soros has revealed he’s emptied his proverbial vaults of a lot of the shiny stuff this year and is calling for a bear market to ensue from here in.

Either way 2012 will be a fascinating year across all the markets and indeed in our own homes and places of work.. There’s little doubt that 2011 has seen a much needed reality check and I reckon we are now all fairly clear of the difficult days and years that lay ahead. Whether it is in our control to improve matters remains the key question.

So I’ll wish all of you a very Happy New Year and as good a 2012 as you can reasonably hope for. Let’s be positive as we face each day but, hey, let’s keep it real too. Nothing wrong with consolidation.

Thanks for your business and feedback and I look forward to being of continuing assistance as we tread warily together through the fickle world of foreign exchange……

Today's Data:

Nothing of note

Interbank Rates as of 08:45 BST

Current Price

Overnight

High

Low

EUR/USD

1.2923

1.2965

1.2903

GBP/USD

1.5432

1.5446

1.5401

EUR/GBP

0.8378

0.8412

0.8364

GBP/EUR

1.1935

1.1956

1.1886

GBP/CHF

1.4511

1.4538

1.4448

GBP/AUD

1.5195

1.5219

1.5142

EUR/CHF

1.2157

1.2190

1.2154

GBP/HKD

11.9644

11.9752

11.9404

EUR/HKD

10.0246

10.0750

9.9870

GBP/ZAR

12.4870

12.6447

12.4855

USD/JPY

77.52

77.75

77.50

GBP/CZK

3.0784

3.0905

3.0502

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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