Currency Trading in the UK

In recent past the UK currency rates drastically came down after the Bank of England predicted that the future of the Foreign Exchange investment would be not so bright because the recovery of the economy and bank lending conditions coming back to the normalcy would be time taking affairs.

Even the deteriorating conditions of UK economy and the market trends in April 2009 were indicating at UK currency trading to have a tough time ahead.

But as the currency trading hugely depends on the correlations between the moves of different currency pairs, the oil prices and profits in US equities have caused the jump of the UK currency against the US dollar.

The latest leap of the Sterling against the US dollar has shown that the world economy has started moving towards a positive direction as the UK currency has gone up almost 6% against US currency in 2009 May, making the highest monthly gain after 1993.

According to the US business review and Euro Zone, the global economy has started recovering from the shock the recession has caused. Though it will require time but the trading conditions in the world market are sure to improve in future.

But the IMF opposed this view and said that UK economy has very poor chance of quick recovery and will continue to be unstable in coming days. It further warns the investors to be cautious as the UK market is still vulnerable and can cause more damage to the financial sector.

Though the current improvements in world economy have given the UK currency trading an impetus, it does not seem to last long.

The forecast issued by the US Federal Reserve for the next three years is also very bleak. According to it there will be only some average improvements in the US as well as the world economy.

According to the market analysts these gloomy views about the future of the global economy, the forecast about the future risks of unemployment and other severe problems have made the investors feel worried and insecure.

This eventually hurts the sentiment of the UK currency traders as well. UK stocks have also shown several drops recently and therefore the investors are still shaky about making any trading in UK currency.

According to many experts the recent leap in sterling seems to be just a temporary thing. The possibility of UK economy to go through further rough patches is restraining the traders to deal in UK currency.


For more information about foreign exchange please visit: Currency Trading UK

Article Source: http://www.articledashboard.com/Article/Currency-Trading-in-the-UK/916038