UK Bailout Plans Revealed
The United Kingdom’s second bailout plan came to light yesterday as lawmakers discosed the terms and intentions of this new round of economic life-preservers were thrown at the Pound Sterling. Forex Traders were not impressed as the GBP/USD traded lower towards the 1.43 mark during a session that saw the US markets closed. The pound is trading lower today again in expectation of the British CPI figures for December – which are not expected to be great (expectations are that it will come in down 0.9%). The British economy is showing signs of deflation at this point, the question the Forex Brokers and investors are asking themselves at this point is just how bad is it?
As predicted, the markets are starting to taper off a bit – not certain of which direction it wants to travel in. Many are pointing to the loss of the investing and trading community’s appetite for risk as there are too many uncertainties out there right now and core economic data continues to come in worse than the broker trading conglomerates are expecting. Just look at what happened to the Royal Bank of Scotland yesterday. As we spoke about, they announced a huge loss that was more than expected and as a result the entire London market as well as the Pound Sterling was traded down as fears of what is to come haunt investors. The word nationalization comes up when talking about big government bailouts of financial institutions and no matter how they seem to explain it, this is what it looks like. Forex trading companies and private investors are looking to the future and seeing a constricted and restricted free market system and this is the primary issue keeping the markets in a state of flux.
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