Mike Paterson’s daily Forex brief
Little action to report from the past 24 hours as traders ease their way into a new week still desperately looking for clues and, despite some profit-taking yesterday, the US Dollar still seems to be the favoured currency of choice.
EURUSD had a brief rally yesterday after failing to break lower through the supports I mentioned, hitting 1.3160 before traders gave up the chase and locked in some money. With EURUSD rallying back above 1.3240 we saw GBPUSD also climb higher to 1.5883 after the 1.5780 support proved a step too far at this point. But on both pairs this morning we’ve seen a move back lower, albeit slowly.
EUR pairs have been in tight ranges still with EURGBP going nowhere fast at 0.8330 (GBPEUR 1.2004) but overall the Pound has found a little support against more rapidly weakening targets.
One of those being the Aussie $ which has fallen to 1.4955 and 1.0603 versus the Greenback, as the RBA left interest rates on hold at 4.25% leaving room for further cuts as expected if needed. And they would certainly have taken heed of China’s growth forecast cut to 7.5% the previous day, which has dampened markets across the board. Further comments overnight from the PBOC (People’s Bank of China) that the Yuan is near levels of equilibrium for the suggests further evidence of slowdown, with inflation data out later this week also forecast to fall sharply to 3.4% from 4.5% the previous month.
A report just out from the IIF (Institute of International Finance) warns of highly damaging ramifications of a disorderly default on Greek government debt which, while nothing ,adds a touch of reality to the smoke and mirrors being proffered by less impartial observers. EURUSD is down to 1.3185 on the story.
Eurozone GDP data is due out today at 10:00 GMT to consider, so it will be eyes on the newswires again for the rest of the day. UK housing data just out is weaker than forecast and caused a little GBP dip.
Quite an eventful night at Roots Hall which some of you may well have witnessed on TV, with the Shrimpers finishing with 9 men, saving a penalty and earning, on reflection, a point rather than dropping two. Makes the turmoil over at the Bridge look like a walk in the park eh?!
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