Sterling higher in currency trading | ||||||||
| Inflation continues in Britain, and that means that the Bank of England may be interested in raising rates at their next meeting. Inflation has been above target for months now, and the BOE has been holding the course. However, it might be time to rein things in. The difficulty with raising rates right now in an effort to slow inflation is that the British government has made cuts in spending in order to reduce its sovereign debt. As a result, the economy is not really growing as much as hoped. Lower rates help stimulate economic growth. The BOE has been performing a balance act for quite some time, but inflation is starting to become an issue. The sterling is up in currency trading on the FX market against the U.S. dollar on the expectation of a higher interest rate. The U.S. dollar is also struggling as inflation remains low in America, and economic recovery is slow.  | ||||||||
Topic Tags: Bank of England, currency trading, FX market, interest rates, sterling, U.S. dollar | ||||||||
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| January 07, 2011 |
Ben Bernanke Dovish on U.S. Economic Recovery |
U.S. dollar gains against euro in forex trading |
| Ben Bernanke has once again dampened hopes of a fast economic recovery. His most recent assessment of the economy is that things are likely to continue at a sluggish rate. We're moving in the right direction, but quite slowly. The news has added to the disappointing jobs market data, and sent the U.S. stock market lower. The U.S. dollar is also lower against a number of other currencies on the news. Greenback is down against the sterling and Aussie, both of which are showing signs of faster economic recovery. However, the U.S. dollar is up against the euro in forex trading. The euro continues to struggle as forex traders ask questions about sovereign debt. This state of affairs could change soon, though. Republicans in the House are bringing focus back on U.S. debt and that may encourage scrutiny by forex traders who may realize that the U.S. is in a rather precarious situation indeed -- one that might even rival the euro zone. |
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