Reality check for the Pound
Posted on November 25, 2009 by Yohay
Filed Under Forex News | 6 Comments
After riding on dollar weakness, the Pound got a reminder of the grim reality – the country is still in recession. The reaction was a retreat of the Pound.
According to the revised version of GDP, or the second release, the British economy squeezed by 0.3% in the third quarter of 2009. Some of the world’s biggest economies have ended their recession periods in Q2, and others in Q3. Britain is seriously lagging behind.
This figure was revised upwards from the preliminary release, that showed a contraction of 0.4%. The first release was very disappointing, and sent the Pound down by hundreds of pips.
Special weakness of the Pound
But also today, the Pound’s weakness stands out. The US dollar is on the retreat today, falling across the board. EUR/USD is above 1.50, AUD/USD is touching 0.93 once again and USD/CHF reached a year-to-date low of 1.0030, very close to parity.
Also the Pound gained from this dollar weakness, climbing 100 pips during the morning up to 1.6720. But this was before the release. After the GDP release, the Pound fell to 1.6670. The Pound is falling against other currencies as well: EUR/GBP is on the rise, and GBP/JPY is falling.
GBP/USD, like other currencies, moves up and down on the dollar’s strength and weakness. But it also has its own problems, which are quite serious. Today we’ve seen how the Pound stood out – and fell.
For more on the Pound’s events this week, and a technical analysis, check out the GBP/USD forecast.
Enjoyed the post? You may want to subscribe by RSS feed or Email.Comments
6 Responses to “Reality check for the Pound”
Leave a Reply
Popular Forex Posts
Daily FX Headlines- Forex Strategy Corner: Bollinger Bands Techniques for Trading September 2, 2010
- EUR/USD: Trading the Change in U.S. Non-Farm Payrolls September 2, 2010
- US Dollar Forex Options Sentiment Points to Pullbacks September 2, 2010
- The FX Market has now Entered the Pull of Friday NFPs September 2, 2010
- British Pound Forecast to decline Against Japanese Yen September 2, 2010
-
Stay up to date!
-
-
[...] Britain, a day after the confirmed recession in Q3, CBI Realized Sales are released. The figure is expected to continue rising, from 8 to 12 [...]
[...] crisis, with British banks having to cover the debt. GBP/USD is down to 1.6360. This follows the reality check for the Pound – the UK is still in [...]
[...] The British Pound was hurt also by the Q3 GDP, that was confirmed at a fall of 0.3%. The crisis sent the Pound crosses off a cliff. After trading in an almost 500 pips range, GBP/USD [...]
[...] Pound suffered from a confirmation of the recession and also from the outbreak of the Dubai crisis. In addition to the PMI and HPI figures, speeches by [...]
[...] addition to the ongoing recession, the heavy deficit, that will be seen this week, and a possible expansion of the QE program, may [...]
[...] The British economy is still shrinking in Q3, and every release is painful: the first release was the biggest shock, when a 0.4% contraction was reported. The revised version was better, only 0.3%, but reminded us that Britain still suffers. [...]