Pound makes a Rebound after Good Economic News

Wednesday, May 13, 2009

The news from England was great yesterday and yet I still don’t feel secure that we are through this right now, perhaps which is because anything good out of England is great considering the slide they have taken in recent months. The producer prices are better, but their overall production is down which alone would cause a decrease in prices – think about it, if there are less manufacturers bidding for the same supplies, it means there is less of a demand – less demand equals lower prices. So why is everyone celebrating?

Anyway, the Pound rallied on this news yesterday and the British papers have talks about how things are getting better – well are they? The parliament is at near Mutiny stage over crazy things that MP’s charged to the public in the name of “service to the commonwealth” – the banks are teetering on insolvency and would be without the help of the government, or should I say more public money. The manufacturing sector is down and consumer prices are up – so what is the fanfare about?

Ahh, a distraction. Forex online blogs have taken a vacation from the Euro and USD and shifted focus as of late to the Sterling, primarily because there is nothing else going on. IN a hunt to find something good – writers have manufactured another insignificant piece of information into a big deal – perhaps there is an increase in manufacturing and production going on, just maybe not what we really think it is.

So with that, the Pound was up across the board – the Aussie had a good day as well, the Swiss National Bank said that they are still ready to move aggressively against any downturn in the economy and will do so if it is warranted. Absent in Tuesdays trading was the Euro and the USD which went to sleep after weeks of volatile and intense trading. We hope to see them return soon – before the Forex Traders fall asleep.


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