Easing of U.S. Banking Concerns Supports Pound

The British Pounds are trading higher this morning. Traders attribute much of the rise to short-covering and an easing of concerns regarding the U.S. banking system.

The British Pounds are trading higher this morning. Traders attribute much of the rise to short-covering and an easing of concerns regarding the U.S. banking system.

News that the U.K. budget deficit will widen came out yesterday and kept downside pressure on this market throughout the day. This is a much bigger story which is likely to have longer-term ramifications. Investors still don’t have much confidence in the U.K. economy and are looking for a weaker Pound until the economy starts to show a solid recovery.

The newly revealed weakness in the economy is a good indication that Bank of England quantitative easing is likely to continue. Because of the size of the budget deficit, the government does not have any more room to provide financial stimulus.

James A. Hyerczyk has been actively involved in the futures markets since 1982. He has worked in various capacities within the futures industry from technical analyst to commodity trading advisor. Using W. D. Gann Theory as his core methodology, Mr. Hyerczyk incorporates combinations of pattern, price and time to develop his daily, weekly and monthly analysis. His firm, J.A.H. Research and Trading publishes The Forex Pattern Price Time Report... More

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