Mike Paterson’s daily Forex brief

Dare I say that we’ve seen more of the same? Well, we have, and after a brief flutter with a more risk-on sentiment on Friday following talk that the IMF act as the vehicle of support for the EFSF we’ve seen the various global cracks re-appear and traders take a more cautious, risk-averse, approach.

EURUSD is back down to 1.3450 having seen some good Middle East sovereign selling, while GBPUSD is once again clinging to 1.5700 having made good ground back above 1.5800 on Friday. There have been plenty of sellers in this pair overnight as poor UK house price and retail price/volumes data give another reality check on the economy. This is turn has given traders further belief that we might some more QE from the BOE sooner rather than later.

Footfall through UK shops was the lowest since the blizzards last December and highlights the fact that last week’s Retail Sales increase was due in no small part to heavy discounting by retailers in a bid to prise some money out of people’s pockets.

UK house asking prices fell at their fastest monthly rate for almost four years, hit by mounting economic uncertainty, according to the latest Rightmove survey. UK house prices have proved fairly resilient of late, drifting sideways supported by record low lending rates, but the Rightmove survey suggests the latest bout of economic turmoil is taking its toll. House asking prices fell 3.1% on the month in the survey, which spanned much of October and early November, the sharpest such fall since December 2007.

Talk this morning of good name sellers in GBPUSD which has also lifted EURGBP to the key 0.8600 resistance level (GBPEUR support 1.1628) before falling back. Strong support remains around 1.5650 and 1.5600 but there are growing signs that these might eventually be broken.

Elsewhere though the Pound is hanging in there for the moment, as commodity currencies in particular also fall back after Friday’s rally, particularly the Aussie which also finds itself under pressure from a breakdown in the Quantas talks.

In the Eurozone new ECB President Draghi gave his inaugural speech and said that he believes the ECB should be the Eurozone’s lender of last resort but expressed his deep concerns over the slow pace of government reform, whilst over in Spain the opposition party have won the comfortable majority we were expecting. A change in government, as is currently the play, gave brief hope and a fillip to the Euro but this was once again short-lived.

Stock markets have fallen again, as has Gold, and while there’s little data today traders will be looking ahead to tomorrow’s latest US GDP figures as well as the usual stream of rhetoric.

And talking of continuing patterns, it was business as usual for the mighty Shrimpers (aka Southend United FC for the benefit of new readers) who earned yet another 3 points to keep them at the top of League 2. Oxygen please nurse!

Have a good week everyone.

Today's Data:

15.00-US- Existing Home Sales

Weekly Economic CalendarHERE


Interbank Rates as of 08:42 BST

Current Price

Overnight

High

Low

EUR/USD

1.3458

1.3539

1.3440

GBP/USD

1.5704

1.5810

1.5688

EUR/GBP

0.8568

0.8594

0.8545

GBP/EUR

1.1666

1.1700

1.1634

GBP/CHF

1.4442

1.4513

1.4425

GBP/AUD

1.5824

1.5856

1.5761

EUR/CHF

1.2371

1.2417

1.2370

GBP/HKD

12.1753

12.2575

12.1629

EUR/HKD

10.4366

10.5354

10.3956

GBP/ZAR

12.9566

13.0311

12.8681

USD/JPY

76.80

77.02

76.75

GBP/CZK

2.9781

2.9861

2.9615

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.

Comment Here!

comments