Mike Paterson's daily Forex brief.

As US debt talks continue to stumble and fail the Euro finds itself back on the must-have/best of a bad bunch list. With new measures being proposed on both sides in the US but the stand-off continuing, President Obama has made an impassioned plea for a solution to the $14.3 trillion crisis as the Treasury Dept says it will not be able to meet its obligations if the debt limit is not raised………..


The greenback has been sold heavily and EURUSD has overnight surged through key resistance at 1.4450 and 1.4500 stopping just short of another substantial technical line around 1.4525. EURCHF has moved higher despite the Swissy still being in safe- haven demand but with USDCHF finding support around the psychological 0.8000 level.

EURGBP from having a quiet day yesterday has also moved higher overnight capping at 0.8885 (GBPEUR down to 1.1254) as GBPUSD lags behind and the Pound overall struggles to make any impression ahead of this morning's key UK GDP release.

ForexUK provisional GDP data for Q2 will be released at 09:30 BST and the market is expecting that the economy grew at around 0.2% compared with 0.5% in Q1.There is a rumour doing the rounds that the number will be much worse than expected and may even show a contraction of 0.1%-0.2%. A bad number certainly wouldn't surprise this writer who remains bearish on the UK recovery and the Pound but there may well be a case for "sell rumour- buy fact " so even if the number is poor but not as bad as rumoured then the Pound may well get a temporary lift. We shall know soon enough folks!

It's going to be another lively day out there in FX Land……………

Today's Data:

09.30-UK- Q2 GDP (Provisional) / Index of Services

15.00-US- New Home Sales./ CB Consumer Confidence / Richmond Manufacturing Index

Interbank Rates as of 08.37 GMT

Current Price

Overnight

High

Low

EUR/USD

1.4496

1.4523

1.4357

GBP/USD

1.6336

1.6369

1.6265

EUR/GBP

0.8875

0.8885

0.8823

GBP/EUR

1.1265

1.1334

1.1254

GBP/CHF

1.3112

1.3142

1.3064

GBP/AUD

1.4948

1.5040

1.4936

EUR/CHF

1.1640

1.1663

1.1538

GBP/HKD

12.6650

12.6910

12.6090

GBP/ZAR

10.9470

11.0812

10.9293

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 including working with UBS, Credit Suisse and as head of the FX team at the State Bank of Victoria in London. Mike now works as an independent consultant providing a fully bespoke service to the corporate and private sectors as well as 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

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