The British Pound rallied on Thursday following the previous day’s budget deficit related weakness.
The British Pound rallied on Thursday following the previous day’s budget deficit related weakness. Today’s rally was probably related to short-covering and profit-taking as it seems most unlikely that investors would express happiness with the increase in debt announced today and another increase in income taxes.
I am still questioning the decision to raise taxes for top job earners. This decision could backfire since it will take more money out of the hands of consumer spenders and put it in the hands of the government. This can’t be good for the economy especially if retail sales continue to drop.
With the main trend down on the daily chart, watch for another opportunity to get short. The fundamentals haven’t changed, don’t bet on a swift recovery just yet.