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It was a volatile session in currency markets overnight with GBP taking the lead in the movement stakes. Initial weakness for the pound (which hit cycle lows against the EUR) following soft inflation data for September gave way to a strong rebound after BOE’s Bean commented that the bank’s quantitative easing program is working and that the worst of the recession was past. He also indicated that the MPC will need to gradually remove monetary stimulus as the economy picks up.
There has been much talk about the GBP/USD Tuesday with its move through the trend-line resistance.
The big support at 0.9080 was also in play in the EUR/GBP. The Bank of England’s leader, Mervyn King could either confirm or spoil the technical break Wednesday. From a fundamental perspective, it's tough to see what the driver should be for a further appreciation in the GBP/USD.
No one replied? done anyone trade in GBP? I think its a major currency and most of the forex traders trade them.
Low interest rates and the prospect that they will not be going higher anytime soon is still weighing the Dollar down. Speculation by analysts suggests that it could be the middle of 2010 before the US in a position to raise their interest rates, a scenario that spells a long and painful winter for Dollar traders.