Mike Paterson’s daily Forex brief

The FX markets have seen some relative calm over the past 24 hours as we approach interest rate decisions today from the BOE and ECB with the all-important ECB press conference to follow.

No action is expected from either central bank but the BOE may hint at further easing which the market has factored in to some extent so if no mention then expect a small GBP rally.. And the ECB press conference will be the usual test for Trichet to feed as much info into the market as he sees fit without tripping up on the sometimes cute questioning from the floor.

With the EUR finding some stability from its usual buying sources EURCHF has now moved further off its 1.2000 peg and is above 1.2100 but still below the highs of 1.2198 seen after the SNB action. This morning they've been seen in the forward market, or at least checking rates, to add further weakness to the Franc.

EURUSD therefore is currently finding a base at 1.4000 but there are still sellers to be seen on the rallies above 1.4100 so we've seen a tight range. EURGBP too is firming as the Pound continues to fail to attract any loose money and we've seen a move back up toward the 0.8850 resistance level (GBPEUR support 1.1300). The pair should come in for plenty of attention around lunchtime after BOE and ECB statements. GBPUSD continues to languish below 1.6000 but has so far clung on to the 1.5910 support line.

The Norwegian government has warned that its economy can't absorb the NKR appreciation we're currently seeing so they may have to take action at some point too, and Gold has bounced back a little from a decent fall yesterday after failing to break back up through $1900. Stock markets continue to range trade but I still favour selling the rallies.

The Aussie $ has come in for a little slap after poor jobs data and talking of jobs we get the weekly figures from the US along with their trade balance data at 13.30.

A relatively calm 24 hours then but somehow I can't see that being repeated today.

Oh! And there's talk that the G7 meeting this weekend may produce a co-ordinated agreement on monetary policy easing.

Fasten your seat belts one and all………..

Today's Data:

Weekly Economic CalendarHERE

Interbank Rates as of 08.19 BST

Current Price

Overnight

High

Low

EUR/USD

1.4063

1.4100

1.4050

GBP/USD

1.5927

1.5994

1.5923

EUR/GBP

0.8826

0.8841

0.8804

GBP/EUR

1.1326

1.1360

1.1309

GBP/CHF

1.3727

1.3748

1.3680

GBP/AUD

1.5046

1.5098

1.4989

EUR/CHF

1.2116

1.2126

1.2072

GBP/HKD

12.3510

12.4010

12.3460

GBP/ZAR

11.3780

11.4111

11.3536

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

Comment Here!

comments