Mike Paterson’s daily Forex brief

It's been the usual volatile fayre again as traders digest endless streams of rhetoric and announcements including plans to recapitalise European banks (so much for the stress tests), Moody's last night cutting Italian debt ratings by 3 notches to A2 from AA2, and further talk in the market that the SNB will step in again to raise the EURCHF benchmark to 1.2500 or even 1.3000.

We've seen EURCHF move up to 1.2299 so far before retreating a little, having based at 1.2125 yesterday where the SNB were alleged to have been showing an interest. This is turn has helped lift the Euro per se, but not without a few wobbles, particularly when the Italian debt downgrade was announced in thin NY markets last night were we saw EURUSD drop sharply and rise again and EURCHF fall 60 pips to the intra-day pivot at 1.2180 only to come straight back to 1.2230.

On the back of all this we've seen EURGBP failing to break through the strong buy interest at recent multi-lows around 0.8530 (GBPEUR resistance 1.1720) and head all the back up to test strong pivot resistance at 0.8650 (GBPEUR down to 1.1560) before retreating.

GBPUSD has also seen good interest both sides of the price with buyers now lined up at 1.5415 and 1.5330 and sellers at 1.5495 and 1.5540. EURUSD has sellers between 1.3350-75 and strong buying interest at 1.3250 mostly from our Asian dollar-diversifying central banks.

Overall the Pound has given up many of its recent by-default gains as commodity currencies stage a decent rally in a more risk-on environment. No shocks there then.

Last night Fed Chairman Bernanke said they were prepared to take more action if required but no immediate plans for Q3 even though the option remained on the table.

Gold had another wobble down to $1590 from $1664 before recovering. A break below $1580 would send a lot of short-term speculative buyers running for the hills.

Plenty of data out today with UK GDP and Current Account numbers out shortly followed by Eurozone GDP and Retail Sales, then some figures from the US coming out this afternoon. Not to mention traders trying to second- guess the BOE and ECB tomorrow.

Things ain't going to get any clearer anytime soon…….

Today's Data:


Live Economic Calendar Powered by Forexpros – The Leading Financial Portal

Weekly Economic CalendarHERE

Interbank Rates as of 08.22 BST

Current Price

Overnight

High

Low

EUR/USD

1.3310

1.3360

1.3259

GBP/USD

1.5430

1.5494

1.5410

EUR/GBP

0.8624

0.8637

0.8601

GBP/EUR

1.1593

1.1627

1.1576

GBP/CHF

1.4235

1.4265

1.4188

GBP/AUD

1.6161

1.6251

1.6133

EUR/CHF

1.2270

1.2299

1.2210

GBP/HKD

11.9628

11.0125

11.9473

GBP/ZAR

12.5633

12.6245

12.4175

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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