BOE Governor's words tank the Pound

The British Pound Sterling fell across the board on Wednesday, after the Bank of England’s Governor, Mervyn King, said a slide of the Pound could help UK exporters and aid Britain's recovery from recession.

The remarks came after the UK released data on inflation which came in below the target, a better than expected showing.

Forex Online Investors are nervous however, even with the good inflation news, that after the elections early next year, the new government will implement a policy of fiscal tightening, which will likely cut the asset-buying program, a program that is widely hailed as a success.

At 10:15PM GMT, the British Pound was trading down 1.2% versus the US Dollar to .9288, down 1.02% to the Euro to .9042, down 1.15% to the Japanese Yen to 148.6, down 1.1% against the Swiss Franc to 1.6691 and down 1.06% versus the Australian Dollar to 1.7802.

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Some Action Seen in USD while EURJPY showed some slow moves

The US Dollar rose from the lows set on Monday, after Forex investors sought to lock in profits from the steep fall. Analysts speculated that the mood on the street was that the Dollar fell too far, too fast and that was the cause for the pull back on Tuesday.

The trend on the USD is still lower, although and investors can be sure to see more down days in the future. The ICE Dollar index rose to just over 75 after falling to a fifteen month low on Monday.

At 10:20PM GMT, the US Dollar was trading up .2% to the Euro to 1.4968, up .1% against the Australian Dollar to .9286, up .2% to the New Zealand Dollar to .7415, up .14% versus the Swiss Franc to 1.0087 and down .2% against the Japanese Yen to 89.75.

Chart Analysis: EURJPY

A new four-day high was rejected today and interest rates have ticked sharply lower, suggesting there could be more downside pressure for the shortest term on JPY crosses.

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Chart Analysis: EUR/GBP

EURGBP trying to make a new foray to the downside today, but will likely need a good look at Wednesday's Quarterly Inflation Report before any decisive move can be made. Note the approaching 200-day moving average to the downside.

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Unemployment rate shocker boosts Dollar

The US unemployment situation worsened to levels unseen since 1983 prompting many Forex traders and investors to seek safe-haven shelter in the Dollar. The number of unemployed Americans rose to 10.2%, a .3% increase from expectations and amplified concern that while the economy is showing growth, the employment situation is dire.

Government estimates assumed the rate would not reach 10% until 2010 and the stimulus package signed in March was supposed to curtail the level to no more than 8.9%.

Meanwhile, the US House of Representatives passed a 1.3 Trillion Dollar health care package, bringing US sponsored health care to all Americans.

The contentious legislation is seen as adding to an already irresponsible debt load, making the boom of the past decade seem that much farther to attain.

At the close, the US Dollar was up 1.1% to the Euro to 1.4845, up .11% to the Yen to 89.95, up .24% against the Canadian Dollar to 1.0726, down .18% to the Sterling to 1.6611, up .27% versus the Swiss Franc to 1.0144 and down .45% against the Australian Dollar to .9229.

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