Pound is weakening.

August72009

Why did pound fell today (August7l,2009) the interest rate was kept at the same rate but...? BOE does something that reveals the shadow behind him....the weakness of their economy.


the pound fell from near the highest level against the dollar since October and dropped versus the euro as the Bank of England increased its asset-purchase plan on concern the recession is deeper than previously anticipated. this is referring to the additional 50 b pound of treasuries purchased by BOE

The rand dropped versus all of its major counterparts as foreign investors sold stocks and bonds at the fastest pace in at least 12 years and on a potential utility strike. European Central Bank President Jean-Claude Trichet said the 16-nation region won’t return to growth until next year and interest rates are appropriate.

“The pound is selling off on the Bank of England’s expansion,” said Geoffrey Yu, a currency strategist at UBS AG in London. The currency may “rally later as the market becomes reassured about growth prospects,” he said .

So to create a sentiment case, the fundamental trading is taking place in todays counter.
It is not quite shocking to know that pound drop, since the rally of GBPUSD since the March , that simulataneously taking back the equity market to skyrocket. Bubble? sucker rally? we'll talk about that later. Notice that there is always argument and these controversy keep some of us blinded to where we can't see the opportunity to profit.

Note that pound rallied for rising house price in England. we can that as pound mover..