Whats Influencing Forex Movements in the UK?
The honeymoon period with the new Conservative government is over. Sterling enjoyed a brief rally this summer, with a 2% rise against a basket of currencies of the UK’s major trading partners and rose around 9 cents to hover just below the USD $1.60 mark. Sterling has managed to perform relatively well because of the inherent weaknesses of other economies; the Euro was held back (the Greek economic crisis) and the US dollar has been suffering against every other major economy in the world as it struggles to shake itself out of the effects of recession. Now the reality of the UK’s economic situation, and in particular the size of the national deficit, is affecting the outlook for sterling. The Bank of England, the UK’s central bank, is also under pressure to control the country’s inflation rate. Inflation has been higher than the target rate set by the Bank for 41 of the last 50 months and there is a very real risk of this increasing. The reason for the potential inflation increase is t
