Mike Paterson’s daily Forex brief
We’ve seen more US $ buying in the past 24 hours as Greece warns that if Private Sector Investor bondholders don’t accept the terms of the bond swap, the Greek government will invoke Collective Action Clauses, (CAC’s).
They can threaten this simply because the EU-IMF bailout cannot proceed without the bond swap. If that happens, Greece will restructure its debt but on different terms than the ones in the current deal meaning an effective default, and not one in very orderly fashion either, as had been hoped in even the worst case scenarios.
EURUSD has been down to 1.3110 just above a large barrier option support at 1.3100. GBPUSD finally came down too through the strong 1.5780 support and we’ve seen a low of 1.5707 so far. EURGBP is the Steady–Eddie right now therefore at 0.8344 (GBPEUR 1.1984)
Also finding favour in this wave of risk-off trading is the Yen which has benefitted from huge amounts of cross-selling in pairs such as EURJPY and AUDJPY. The Aussie $ took another slap after much weaker than expected GDP data.
Gold also came under fire again and dropped through the $1690 support area to test the next big line at $1650 which held in the last attack down here a couple of months ago. Low so far has been $1663 before rallying a little but don’t rule out another attempt and should it break we can expect another sharp drop. The market is long of Gold and the short-term punters will bail out for sure.
Some decent slices of data out today and at 10.30 GMT we have the 10 year German bond auction to get us going in what will be a lively day.
And finally, and with little apology to Chelsea and Arsenal fans during their moment in the spotlight, there is only one sports-related story of note today. It’s the 60th birthday of Isaac Vivian Alexander Richards, “The Master Blaster”, “I.V.A. “ , arguably (certainly by this writer and cricket nut) the greatest batsman of the modern game It’s been my privilege to not only have watched many of his thrilling performances but also meet the great man in his home patch in Antigua ‘94 and over here in the UK. Never have I felt such presence. Naturally gifted, naturally intimidating and never one to suffer fools, but a thoroughly decent man. Should be one helluva birthday party!
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