SubscribeDaily Futures Commentary June 30, 2009
Tuesday, June 30, 2009
The September British Pound surged to the upside overnight despite news that the U.K. economy shrank more than previously forecast. The U.K. Gross Domestic Product report showed that during the first quarter the economy suffered its biggest contraction since 1958. Weakness was seen across the board in the economy as everything from construction to services showed some sort of weakness.
The three-month long rise in the British Pound has defied most analysts who are in the same camp as Bank of England Governor Mervyn King who believes that the road to recovery will be long and hard. Even if the global economy is beginning to bottom, the U.K. economy still faces rising unemployment. This is a lagging indicator, but if unemployment continues to march higher then eventually consumer spending will suffer. If consumer spending falls along with confidence then the economic recovery may slow considerably.
Although the fundamentals do not support the 90-plus day rally, there are signs this morning that a top may have been reached. Earlier this month the September British Pound formed a pair of tops at 1.6660 and 1.6620. The subsequent break from the …
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