Mike Paterson’s Daily Forex Brief
It’s been a quiet 24 hours as markets await today’s latest decisions on interest rates and QE from the BOE and ECB, but we can expect it all to kick off again soon enough.
EURUSD has consolidated above 1.3500 after another mini-wobble and this morning has been up to 1.3578 dragging with it EURGBP to 0.8662 (GBPEUR down to 1.1545). Euro pairs across the board continue to attract buyers in the dips.
The expectation from the BOE is no change in rates or QE but ahead of the announcement we have the release of key data (see below) and Governor-elect Carney appearing before the Treasury Select Committee.
Markets have been assuming that his dovish stance on rates signals further easing down the line when he takes up the post, so we’ll be analysing his every word for clues. He’s too experienced to give too much away but he may want to set out his stall from the off.
By the time we get to the midday BOE announcement expect the Pound to have been the centre of attention. GBPUSD has been going nowhere fast after the sharp decline from 1.5800 and indeed has been consolidating but the rallies are still being lined by sellers. NIESR GDP estimate out at 15.00 will also be keenly awaited.
Will Draghi give anything away at the ECB press conference? We usually expect a firework or too and invariably aren’t disappointed. No change in rates expected but with the all news wires alive with quotes this week regarding Euro strength we can expect a question or two from the floor to try and trip him up.
The Aussie dollar once again failed to improve after some decent jobs data and continues to be under threat of major drop, assuming the market doesn’t get too short too low in which case we’ll see the inevitable rally before any crash.
So, all in all it’s eyes down for a big day ahead. Get your orders in because it could be a lively ride.
And lively would be a decent adjective for England’s performance v Brazil at Wembley last night running out 2-1 winners, their first victory against them in 23 years. Solid performances from key areas with Lamps reminding Chelsea of what they’ll be missing next season. Burkhina Faso will face Nigeria in the final of the always entertaining Africa Cup of Nations.
Yesterday’s sports nod missed two key items which I would like to correct now under pressure from various readers!. Firstly yesterday was also the 20th anniversary of the untimely death of legend Bobby Moore, and how could I have failed to mention that the mighty Shrimpers are now only 90 minutes away from their own Wembley appearance in the Johnstone Paints Trophy, having secured a 1-0 semi-final first leg advantage on Tuesday night.
Heady days indeed!
Interbank Rates at 08:43 BST
Today’s Data: BST
09.30-UK – Industrial Production / Manufacturing Production / Trade Balance
09.45-UK – BOE Governor-elect Carney speaks
11.00-EU – German Industrial Production
12.00-UK – BOE Interest Rate/QE Decision
12.45-EU – ECB Interest Rate Decision
13.30-EU – ECB Press
13.30-US – Weekly Jobless Claims
15.00-UK – NIESR GDP Estimate
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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.