Forex Investment and Currency Trading

Sterling has been torched in recent weeks, and is nearly 20% down on its January 2007 peak. That is a similar fall, albeit slightly more drawn-out, than the 20% decline sterling suffered in the immediate aftermath of the decision to leave the ERM in 1992. Current economic events, and how they will impact the UK economy, are every bit as momentous as the ones of 1992 (far more so, indeed), but there is a crucial difference between the ignominious exit from the ERM as well as one really important similarity.
The UK is second only to the US in being close [...]

[Read more →]

While UK economic growth has remained resilient compared to the US, the British economy continues to show signs of the potential for a sharp deterioration in the months ahead. However, surging inflationary pressures will likely prevent the Bank of England from cutting interest rates again ahead of 4Q 2008. Since the MPC’s May 8th meeting, when the BoE somewhat unexpectedly kept rates on hold at 5.00%, the market has dramatically altered its expectations of UK interest rates in favor of tighter monetary policy. However, the GBP has thus far failed to strengthen in reaction to the market’s changed interest rate [...]

[Read more →]

The UK economy continues to display surprising resilience to the US slowdown and the global credit crunch giving the Bank of England (BoE) greater leeway to separate its monetary policy response to moderating growth from its actions to provide liquidity to stressed financial markets.
Retail sales surged 1.0% mom in February despite expectations for a modest fall of 0.2% mom. Moreover, the January advance of 0.8% mom was revised up to an even more buoyant 1.1%. Despite a number of apparent headwinds bearing down on UK households, consumer spending continues to hold up in early 2008. The January/February average of sales [...]

[Read more →]