Forex Trading – news and analysis on the UK

At the meeting last BoE, the pound has some measure of relief that the bank has decided not to go ahead with the measures rumored to reduce the deposit rate for banks that held their reserves the central bank.

Today, however, the bank confirmed that it intends to take such a step and had a huge hit GBP compared to the overall market, swooning all the way back below 1.6500 against the dollar and sending EUR / GBP to a new since June

The purpose of this measure is to revive lending by banks, which are capital panel as they try to repair their balance sheets and all kinds of goods they contain still ugly. The pound yesterday came very low with little or no flow of new and one wonders if anyone was in the know in advance – very suspicious.

In all cases, the book has been very consistent Inthe Forex market to respond to every movement of the BoE in this part of the cycle.

Let's see if EUR / GBP to pay the moving average of 200 days around of 0.8885, just above today's high to date .. This sell-off in GBP / USD was rather harmful to the setting the trend – see more in the table today. Meanwhile, the RICS House Price Balance number was far better than expected and suggested that real estate agents see more upward rather than downward price trends in the housing market.

The RBA statement at its last meeting at the beginning of month have been much less aggressive than expected, suggesting that a rise in October the market was trying to price has been somewhat premature. The minutes released at night to confirm that the trigger finger of the RBA is less itching for the moment, as he sought to avoid "hardening premature ".

It is somewhat surprising AUD not bite a little more down on this story and the latter, unless the data inspiration for the Australian economy. It seems that Australian operators are following the appetite for risk moves in shares (striped new highs yesterday) and gold, which recently led to the 1000-dollar mark ounce.

Yellen of the Fed came out with a speech rather austere on the economy and warned that the risk of deflation was greater than the risk of inflation. She recommended that the administration do more to support the growth of jobs. Meanwhile, Obama is just in a delicate situation by saying that job losses are "hollow of the wave. "Meanwhile, the Treasury given his discharge from Citibank for a significant gain (if we can obtain current market prices). Now, If this is not a signal that the rally in stocks has risen too far, we would like to know this?

The German ZEW has been dull with the party's current conditions index still pretty awful, even if the expectations from the survey captured a marginal new high for cycle. This investigation is symptomatic of the nature of hope that is there to suggest a strong and show a lot of optimism is already prices here. The expectations component was more than 70 three times in the last ten years, so we're already most of the way to the top "after a remarkably low at -60 in October 2008. It's great if the reality turns to be as rosy, but frightening to contemplate the disappointment when the future is more banal.

The U.S. data was much stronger than expected in the titles and saw the paradoxical re3action USD weaker position after the data (USD move inversely correlated with appetite for risk, blah blah ….), but not convincing. It gets a bit ridiculous – If the U.S. is truly in recovery mode, then it should eventually be a positive force for the dollar.

Looking at the internal workings of retail sales data, it looks like much of the force outside of Automotive and gas is due to return to school (the force in clothing, general merchandise, books and sporting goods stores). The U.S. PPI rose more than expected and bonds are selling massively boosting USD / JPY to new highs on the day. The yen is very sensitive to any further sell-off in fixed income. 91.75/92.00 resembles a key area resistance for this pair.

More Forex Trading Analysis: Moody's came back yesterday to haunt the British Treasury. Almost six months after the rating agency lowered the rating on the sovereign debt of nations, they returned yesterday with a warning that the country will be in negative territory for next year and a half years. With all the whispering of the true state of the economy of the United Kingdom, publicly considered as the stabilization of the entire private sector considered as young, independent auditors at Moody's has apparently undermined the political efforts to paint a clearer picture.

The result of this effort has been a decline in all areas of the pound sterling, which has not performed as bad as it could be after the corruption scandal Parliamentary early summer. In fact, British lawmakers have little been seen on television or newspapers for that matter, keeping a low profile to avoid any further investigations that could bring calls House of Commons overhaul. To this end, even the Exchequer, Alistair Darling and Prime Minister Gordon Brown have been less visible since the scandal – Speaks only when necessary and not really say much when they do.

There should be no surprise that Moody's has found UK economy in poor condition and provides a bleak immediate. With record unemployment, manufacturing and exports to 50 depressions year, the cost of commodities increases dramatically and the increase in poverty at the middle class, it is obvious they are troubled. However, my opinion about the fate of the pound sterling compared to the current economic situation is in bold, by all accounts, and in contradiction with the report Moody's. Here's why:

I believe that the pound sterling is one of the most fairly valued currencies in the Forex Trading on the market there right now because of gold. The United Kingdom has spent hundreds of years pillaging and plundering of nations world for all natural resources, he could find, especially gold. Then the last 60 years have seen the British to restore the land they occupied, bids do not include treasures. The United Kingdom is by far one of the largest collections of gold reserves, next to the Vatican, of course, and the price of this precious metal has been rising ahead of $ 1,000 an ounce last week.

Even if the economy moves two years in depression, the value of the pound sterling may be stable, based on their reserves. I'm not a fan of British economic policy and I believe that the ease with which they went about spending public funds on the bailout has contributed to their situation, but I must respect the Almighty Sterling – he has long, and for a long time to come, be worth every penny (or should I say what about?).

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