Mike Paterson’s daily Forex brief

The calm before the storm of which I had been talking has been exactly that. Now we have the storm once more as fears return over the state of the global economy and the banking sector in particular.


Renewed concerns over the Eurozone, plus weak data from the US and UK have all combined to get traders running for cover once again and we've seen Gold up to record levels of $1869, and global stock markets plunge once more ( FTSE down over 200 points to 4925 but steadying as I type ). Barclays saw falls of 10% and we've witnessed similarly sharp drops throughout the sector globally.

The SNB has been put on the back foot once more, as I suggested yesterday would happen in this scenario, and CHF has been a haven again, although investors are respecting the central bank and not jumping in too heavily for the moment. EURCHF is down below 1.1300 from 1.1550 highs, GBPCHF is lower at 1.13010 recovering from a dip to 1.2974, and USDCHF has failed to break through strong resistance at 0.8000, falling back to 0.7905.

Perversely in these markets, weak US data means a stronger Dollar as investors seek to sell riskier currencies and hey, you need you quite a few bucks to buy Gold with nowadays.

The Euro has been given another slap lower to 1.4258 but China has been soaking up a few down there but talk of stop-loss selling to come below 1.4250. Dissenting voices from within the ECB over the effectiveness of Eurobonds have also added to the bun-fight.

GBPUSD has given up its gains above 1.6500 although overall the Pound seems to be gathering a few followers despite the continuing weak data. Like I said yesterday, every dog has its day in the Best-Of- Bad-Breed competition.

EURGP has had a dip towards the 0.8650 level that I mentioned yesterday (GBPEUR up to 1.1560) and elsewhere we've seen decent gains versus the Aussie and Rand amongst others at 1.5942 and 11.9800 respectively.

Some key data out today from the Eurozone (CPI) and US (PPI), but first up is the PSNBR from the UK at 09.30 BST and I reckon we're in for another lively day not least of which because it's Friday.

And a lively day is also what we’re hoping for at The Oval as England pick up their strong start aided by some rubbish bowling but curtailed yesterday by rain.

Have a great week-end one and all.

Today's Data:

Weekly Economic Calendar-HERE

Interbank Rates as of 08.38 BST

Current Price

Overnight

High

Low

EUR/USD

1.4270

1.4340

1.4259

GBP/USD

1.6466

1.6535

1.6443

EUR/GBP

0.8666

0.8698

0.8661

GBP/EUR

1.1538

1.1547

1.1496

GBP/CHF

1.3000

1.3134

1.2974

GBP/AUD

1.5942

1.5974

1.5878

EUR/CHF

1.1266

1.1394

1.1251

GBP/HKD

12.7660

12.8200

12.7490

GBP/ZAR

11.9464

11.9830

11.8354

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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