THE TIPSTER
EURO-sterling has been under relentless pressure since the turn of the year, dropping over 3 per cent in the first week of the New Year. Support was found yesterday around £0.8290, but the bounce thus far has been less than convincing and the support level looks set for a re-test. If support at £0.8290 fails, it may not be long before we see the market testing new lows. Firstly at 0.8145 for the 6 month low, then £0.8068 for the low of 2010. ETX Capital is quoting £0.8333–£0.8334 for euro-sterling.
The Australian dollar is fast losing its grip on parity against the greenback as the damage caused by recent flooding continues to take its toll. Mines are closed and transport infrastructure has been disrupted. But the floodwaters will abate and so long as raw material demand remains strong – and the extraction sites haven’t been damaged too severely – then there’s every reason to believe this is just a short term reversion. IG Index offers a price on Aussie dollar-US dollar of $0.9854-$0.9855
The flood waters have had their effect on sterling-Aussie dollar too as the pair has snapped sharply back from posting new lows on the 3rd January. After rallying 570 points in a week, the pair has poked its head back above AUD$1.5760, the low in October. A successful close above this level could well see sterling-Aussie retake the AUD$1.600 level. Spread Co offers a spread on sterling-Aussie dollar of AUD$1.5790–AUD$1.5802.
The Swiss franc has hit several records against the euro recently and rose 16 per cent against it last year. The consensus from businesses in Switzerland is that exports will grow from drivers such as consumer goods and chemicals. As long as there is a concern that Portugal’s bond auction on Wednesday could be seen negatively, there is potential for further upside for the Swiss franc. On the technical side, the relative strength index is supported by a rising trend line. Capital Spreads quotes SFr1.2546–SFr1.2550.