Mike Paterson's daily Forex brief

Now that the latest EU mini-crisis is off the front pages, (but let's face facts, it's never going too far away ) it's time to turn our attention to the US debt ceiling talks as the August 2nd deadline looms ever closer. US Democrat leader Reid has called the Republican plan a "non-starter" which is not a good place to be with so few days remaining.


The talks collapsed late on Friday causing USD sales and an instant welcome back to the safe-haven fold for the Swiss Franc which having been cast aside after the EU agreement has found itself everyone's favourite guest once again at the ‘It's-a-Scary-Place-Out-There’ party . USDCHF has fallen to 0.8055 from 0.8200, EURCHF is back down 1.1575 from 1.1820 on Friday exacerbated by the expected downgrading of Greek debt by Moody’s, bringing GBPCHF all the way back down to 1.3140 from the heady-heights above 1.3400.

Gold too is also back at the party and has made its customary rally from the customary dip every time it makes a new record high and we're at $1617, just off the $1624 latest highs and from $1583 seen on Friday. We wait to see now whether there is any reaction in the equity markets after their rally too.

EURUSD has good support around 1.4325 and more below 1.4300 while there is talk of a good size barrier option interest at 1.4450 which has capped the rally thus far. EURGBP is in a tight range still but we can start to expect the usual end of month Euro buying for EU contributions payments by the UK.

GBPUSD is also in a range and the Pound continues to produce a mixed bag of performance but is struggling to make any headway.

Little in the way of data today so it will be all eyes on the States as we head into another week of fun n games in rapidly thinning summer markets…. Going to be a bumpy ride for sure……………

Today's Data:

09.30-UK- BBA Mortgage Approvals

Interbank Rates as of 08.37 GMT

Current Price

Overnight

High

Low

EUR/USD

1.4352

1.4418

1.43328

GBP/USD

1.6288

1.6345

1.6268

EUR/GBP

0.8813

0.8834

0.8795

GBP/EUR

1.1344

1.1341

1.1317

GBP/CHF

1.3170

1.3360

1.3115

GBP/AUD

1.5064

1.5095

1.5012

EUR/CHF

1.1590

1.1770

1.1553

GBP/HKD

12.6280

12.6720

12.6130

GBP/ZAR

11.1094

11.1882

11.0211

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
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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