Mike Paterson’s daily Forex brief

Not a lot going out there right now as the after-show party from the EU summit grinds to a halt and traders look to the US Independence Day holiday tomorrow and summer hols in sunnier climes.

EURUSD came back below 1.2600 after a lack of any further momentum higher but has failed to break down through strong support at 1.2550 so we’re in a 1.2560-1.2620 range. EURGBP has come lower again through the 0.8050 pivot as GBPUSD picked up a few buyers and failed to follow EURUSD all the way back down, with 1.5650 now strong support. EURGBP now has decent support around 0.8000-10 ahead of last week’s 0.7975 lows.

Overall the Pound has found a little momentum as focus remains elsewhere but the resignation of CEO Bob Diamond from Barclays this morning suggests he’ll take no prisoners at tomorrow’s appearance before the UK Treasury Select Committee. There is talk that the BOE may have been privy to the LIBOR fixing and if that’s the case then the can of slugs is well and truly open.

The RBA has left Aussie interest rates on hold at 3.5% as expected and we’ve seen little change in prices thus far in these quiet markets.

Stock markets are still generally better supported but the FTSE has failed to hold above a strong 5650 pivot level thus far this morning, while Gold is having its own little battle trying to hold above $1600.

Forex Update-The Economic Voice Limited

Forex Update-The Economic Voice Limited

UK Construction PMI just out is 48.2 for June down sharply from 54.4 in May and a lot weaker than Reuters’ median forecast of 53.0.It’s the lowest read since December 2009. Seemingly caused by a mix between extra public holiday and weaker underlying trend. Little reaction so far as the current inertia continues.

So a wet and windy UK sees disruption at Wimbledon with Maria Sharapova failing to reach the Quarter-finals but Andy Murray must have a decent chance when his match resumes today. And Stuart Pearce repeatedly defends his decision to leave Beckham out of the GB Olympic team for “football reasons”. Seems like a common theme amongst our national managers eh?

Interbank Rates 08:46 BST

Currency Pair

Current

Overnight

High Low
EUR/USD 1.2582 1.2614 1.2574
GBP/USD 1.5684 1.5714 1.5682
EUR/GBP 0.8020 0.8034 0.8011
GBP/EUR 1.2462 1.2484 1.2445
GBP/CHF 1.4971 1.4996 1.4952
GBP/AUD 1.5274 1.5344 1.5265
EUR/CHF 1.2012 1.2017 1.2010
GBP/HKD 12.1598 12.1830 12.1582
EUR/HKD 9.7575 9.7894 9.7390
GBP/ZAR 12.7172 12.8526 12.6842
USD/JPY 79.80 79.86 79.41
GBP/CZK 31.7920 31.8958 31.7464

Today’s Data: BST

09.30-UK – Construction PMI / M4 Money Supply / Mortgage Approvals / Net Lending to Individuals

15.00-US – Factory Orders

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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