SubscribeDaily Futures Commentary October 23, 2009
Friday, October 23, 2009
The December British Pound is getting hammered this morning, following an unexpected drop in U.K. 3rd Quarter Gross Domestic Product. Today’s news indicated the U.K. recession worsened as it extended into its 6th straight quarter. Traders had estimated a rise in GCP by 0.1% while actual results showed a drop of 0.4%.
This report indicates that the Bank of England will keep interest rates at historically low levels for an extended period of time. The poor showing will likely mean that the BoE will continue to fund its asset-purchase program.
Speculators had been driving up the British Pound the past 10 days in anticipation of the Bank of England ending its asset-buyback program. Today’s selling pressure is likely to drive this market down to 1.6198 over the near term.
The December Euro is holding steady above the psychological $1.50 area. Trading has been light and the range tight despite another good German Business Confidence Report. Traders continue to keep the volatility down out of fear of stimulating the ire of European Central Bank members who want to prevent a rapid rise in the currency. Higher prices could …
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