Mike Paterson’s daily Forex brief

24 hours later and we’ve had more of the same as traders react mutedly to the countless Eurozone rhetoric on what must be achieved today and tomorrow. Whether they achieve it remains to be seen and it seems this time around the markets are not rushing into bullish mode.

But as I said yesterday that’s not so surprising given that we’ve have the not so small matter of the ECB interest rate decision today at 12.45 GMT and with the markets pricing in a 0.25% cut we’ve now got talk that they might cut by 0.5% as a pre-emptive strike. On that basis we could expect to see a rapid sell-off in the Euro but I feel that would be short-lived ahead of tomorrow’s EU summit announcement as few would have the appetite to run short for too long prior to that.

With EURUSD trading in a tight 1.3365-1.3430 range it’s not going to take much to break out and we can expect high volatility upon the ECB decision and the important press conference that follows.

Daily FX Update

Daily FX Update

The Pound got a little lift yesterday from some sizeable Middle East buying of GBPUSD to 1.5740 and this also forced EURGBP down to 0.8511 (GBPEUR up to 1.1749) before rebounding. It appears that 0.8550 (1.1695) now becomes pivotal and we can also expect big volatility on this pair today. Trading again below 0.8520 as I type after peaking at 0.8553.

Today’s BOE interest rate and QE decision at 12.00 GMT is not expected to spring any surprises and we should see both unchanged again.

Nothing of real note elsewhere and little in the way of data today but it’s going to be a lively session for sure.

And on this day in 1980 John Winston Lennon was murdered by a crazy guy in a land where ironically he felt safe. It’s a funny ol’ world.

Today's Data:

12.00-UK- BOE Interest Rate Decision

12.45-EU- ECB Interest Rate Decision

13.30-EU- ECB Press Conference

13.30-US- Weekly Jobless Claims

15.00-US- Wholesale Inventories

Interbank Rates as of 08:40 BST

Current Price

Overnight

High

Low

EUR/USD

1.3401

1.3430

1.3391

GBP/USD

1.5705

1.5722

1.5691

EUR/GBP

0.8534

0.8553

0.8525

GBP/EUR

1.1716

1.1730

1.1690

GBP/CHF

1.4489

1.4541

1.4466

GBP/AUD

1.5275

1.5343

1.5249

EUR/CHF

1.2365

1.2406

1.2359

GBP/HKD

12.1760

12.1892

12.1652

EUR/HKD

10.3926

10.4270

10.3710

GBP/ZAR

12.6745

12.7046

12.5530

USD/JPY

77.47

77.70

77.45

GBP/CZK

2.9591

2.9670

2.9490

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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