Mike Paterson’s Daily Forex Brief
A few hours ago the Reserve Bank of Australia cut interest rates by 0.25% to 3.25% citing downside risks to the Chinese and global outlook, lower commodity prices generally, and noting that the Aussie dollar has remained higher than expected.
The move this time around by the RBA was not widely expected and we’ve seen some AUD selling on the back of it. AUDUSD has been down to 1.0291 and GBPAUD has risen as high as 1.5701. The move has caught out a few EURAUD shorts who had been selling solidly over the past couple of sessions and we’ve seen a scramble for cover from 1.2424 to 1.2545.
Overall the Euro has had a consolidative time of it having found a few buyers again yesterday in the see-saw pattern of the past few days. EURUSD has had another look at 1.2920 and EURGBP had a brief visit to 0.8005 (1.2492) yesterday just ahead of a decent technical sell interest at 0.8010 (1.2484).
Traders continue to feed off scraps and are in effect dealing themselves into a bit of a hole, none more so than GBPUSD which has traded firmly in a tight range of 1.6124-64 overnight. Overall the Pound continues to be a mixed bag still, gaining against the faster weakening Aussie and Rand for example but looking somewhat lacklustre elsewhere.
Little in the way of data today to provide any momentum, so it will be to the newswires that traders look for inspiration.
Not sure what’s going to provide any inspiration to England’s T20 cricket team who yesterday let Sri Lanka off the hook and found themselves on the plane home today. Questions must now be asked over selection policy, Broad’s captaincy and his own awful telegraphed field-placings.
Interbank Rates at 08:45 BST
Today’s Data: BST
09.30-UK – Construction PMI
10.00-EU – Eurozone PPI
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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 firstname.lastname@example.org
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.