As traders trod the choppy waters ahead of tonight's US interest rate decision it was another central bank, the SNB, who livened things up somewhat as rumours spread through the markets that they were going to hike the minimum EURCHF rate from 1.20 to 1.25.

Cue EURCHF up 150 pips in a flash to 1.2214 and USDCHF up to 0.8895 and this morning we've seen further surges in both (1.2331 and 0.8989) ahead of the SNB's monthly bulletin where traders anticipated an announcement. With none coming though we saw a sharp sell- off of 100 pips on each. GBPCHF hit some heady heights of 1.4144 before retracing to 1.4015.

No smoke without fire they say, so we shall remain cautious ahead of any official announcement from the SNB today. Traders are also of the opinion that the Bank of Japan will be seen back in the market soon in another attempt to weaken the Yen.

EURUSD was a beneficiary of the EURCHF move but has failed to hold ground over 1.3700, though there's talk of good size bids around 1.3650 and EURGBP struggles to stay below 0.8700 (GBPEUR above 1.1500). GBPUSD sellers around 1.5750 prevailed but still good support around 1.5650-70.

Concerns remain that Greece will be defaulting at some point soon but the jury is still out on the knock-on effect given the tight Euro entry and exit conditions for any member state. Germany still holds the key….

Main focus for the Pound, and indeed the markets, this morning will be the release of the MPC Minutes from the last interest rate meeting. Any additional votes for further easing and we will see a GBP sell-off. But there's this possibility may already have been factored in and may get profit-takers on any dip. All shall be revealed soon enough at 09.30 BST.

Elsewhere gold and stocks have consolidated but not really advanced despite a severe weather warning from the IMF on the global economy. It doesn't make pleasant reading but that's no shock.

And tonight (19.15 BST) we hear from the US Fed's FOMC with their latest interest rate decision and statement. Once again, as with the BOE, the markets have been anticipating a leaning toward Q3 and whilst we will undoubtedly see some action later the effect could be somewhat muted.

All in all though it makes for an interesting day, and then some……

Today's Data:


Live Economic Calendar Powered by Forexpros – The Leading Financial Portal

Weekly Economic CalendarHERE

Interbank Rates as of 08.36 BST

Current Price

Overnight

High

Low

EUR/USD

1.3668

1.3724

1.3661

GBP/USD

1.5695

1.5748

1.5686

EUR/GBP

0.8710

0.8727

0.8689

GBP/EUR

1.1479

1.1510

1.1457

GBP/CHF

1.4028

1.4144

1.3708

GBP/AUD

1.5285

1.5375

1.5257

EUR/CHF

1.2204

1.2331

1.2138

GBP/HKD

12.1690

12.2100

12.1620

GBP/ZAR

12.1976

12.2496

11.0773

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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