If you are a UK Forex trader then you will no doubt have been pinning your hopes on a rise in interest rates in the UK for quite a time now, and as the UK economy has been doing exceptionally well recently many traders were convinced it was going to be just a matter of time before the interest rate in the UK was increased.
However, after something of a very volatile week of trading on the money markets and an announcement by the Bank of England that the recovery in the UK was not as strong as had been hoped that has resulted in any chance of a rise in interest rates quickly fading.
In fact many traders have had something of a successful week, for the value of GBP against the Euro and the US Dollar in particular has been dropping quite noticeably and quite a lot of trades have been pairing up both GBP with those other two currencies.
The Governor of the Bank of England has come out and publically stated that the chances of an interest rate rise is negligible for the very near future, and as such as a Forex trader that information is something that you should be using when deciding just which currency pairings to place.
Whilst the Euro zone is nowhere near as strong as it once was, thanks to a money printing exercise the Euro has been making gains in regards to its value and many commentators are saying that the Euro has levelled out again the Pound and will not strengthen in value further.
However, the opposite is being said about the USD versus the Pound and as such many investors are pinning their hope and their Forex trades on the value of the USD growing stronger in the next few weeks.
The fact that America has recently just increased their bank interest rates is the reason the USD has been strengthening in value against most other currencies, and many speculators are tipping the Dollar will get down to as low as $1.40 to £1.00 sooner rather than later.
However, whether that will happen is of course anyone’s guess, however as a Forex trader you are always going to be able to try and successfully second guess the money markets and place your currency pairings on any two currencies of your own choosing.
