Mike Paterson’s daily Forex brief

Seems like we've stopped the rot for the moment but it’s a fragile peace as I type amidst plenty of rhetoric out there.

There's been talk circulating that China will inject € 700 billion into the EFSF bailout fund but that does seem somewhat unbelievable and a much larger rumour than the €100 billion we heard on Friday. But hey, if you're gonna spread a rumour why not make it a big one?!!

Either way it seems to have produced a few Euro buyers who have been also slightly appeased by the Greeks suggesting their referendum will be held in December not January. It's still bizarre but hey we may have a month less to worry about it.

Merkel , Sarkozy and the IMF meet later today in what will be a less than cosy (or should that be 'kozy) ménage-a-trois, and we've seen the ECB once again buying Italian bonds unsurprisingly.

So what's the upshot of all this ahead of tonight's US interest rate decision? Well good levels of two-way business have found the Euro edging a tad higher back up to 1.3788 v USD from lows of 1.3635 and GBPUSD up to 1.6049 from lows of 1.5914.

EURGBP yesterday broke lower as the Euro fell but could not get through the strong support around 0.8550-60 (GBPEUR resistance around 1.1690-1.1700) and we've since seen a move back above 0.8600 as EUR buyers emerge.

Just hearing now though that certain ACB’s have been selling this latest EURUSD rally and putting a cap on it for the moment.

No sign of the BOJ overnight, and despite the sharp rally yesterday to 1.2200 on EURCHF we've had no confo of any SNB activity either. Big support now building up at 1.2125-40 though but rallies are definitely being sold into. This one's been capped at 1.2176 so far this morning.

Commodity currencies also bouncing around after the latest sell-off but Gold has had a decent rally back up to $1737.

So will the US Fed do anything today? Consensus seems to be that they won't but we'll be pulling the FOMC statement apart for clues as usual.

Relative calm then, before the next inevitable storm………..

Today's Data:


Live Economic Calendar Powered by Forexpros – The Leading Financial Portal

Weekly Economic CalendarHERE

Interbank Rates as of 08:38 BST

Current Price

Overnight

High

Low

EUR/USD

1.3788

1.3803

1.3635

GBP/USD

1.6039

1.6049

1.5914

EUR/GBP

0.8593

0.8614

0.8565

GBP/EUR

1.1632

1.1677

1.1608

GBP/CHF

1.4154

1.4186

1.4118

GBP/AUD

1.5432

1.5515

1.5345

EUR/CHF

1.2170

1.2176

1.2140

GBP/HKD

12.4350

12.4427

12.3381

EUR/HKD

10.6903

10.6557

10.6289

GBP/ZAR

12.8294

12.9632

12.7410

GBP/CZK

2.9197

2.9616

2.9125

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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