Just a quick update to say that there's a whole heap of stuff still going
on out there with more petrol thrown on the fire after the Irish said No to the
Lisbon Treaty- a moderate form of the European Constitution thrown out by France
and Holland previously- and the G8 did nothing to back up recent rhetoric on
supporting the Dollar.
Last week the Greenback notched up its best week against a basket of
currencies since 2005 as mounting inflation fears and talk by Fed officials
favouring a strong dollar policy saw the market gear up for expected rises in
U.S. interest rates later in the year.
Inflation data from the ECB this morning has added to the view that
Eurozone interest rates will probably go up next month if only as a one off
measure and bearish data from the States just released has added to traders
squaring their Short-Euro/Long Dollar positions.
Euro-Dollar has now risen to 1.5520 from lows of 1.5301 and GBP-USD back up
to 1.9688 from 1.9468 .EUR-GBP came on Friday in exepctation of an Irish No vote
and has largely stayed down below 0.7900 (1.2658 ) having seen lows this morning
in Asia of 0.7860 ( 1.2722 ) and consolidating around 0.7880 ( 1.2690 ).
Overall the battered Pound has picked up a few points in this latest round
of the contest,largely due the belief that UK interest rates aren't coming down
at the mo and, in my view, traders and investers are focussing more on the Euro
and Dollar. I still say sell rallies for long-term gain. The spotlight will
again be on GBP soon enough......
A more complete report to follow tomorrow once the dust has settled a
little after the week-ends fall-out..
I said last time that it's a bit lively out there and it's not getting any
quieter !
Mike
Mike Paterson is a former senior
interbank trader with UBS and Credit Suisse and has been involved in the FX
market for over 28 years. He now runs his own consultancy advising private and
corporate clients on best execution of currency requirements, trading
their phyiscal delivery through a small number of preferred rate providers. For
further information please contact him at :
MSP
Foreign Exchange Services
Office:
+ 44 ( 0 ) 1732 700383
Mob:
+ 44 ( 0 ) 7887
581696Email: mspfx@tiscali.co.uk
