Forex Trading TV Video Blog

The GBP continues to head lower against the EUR as Britain may have a further Interest Rate cut priced into the EUR/GBP. There is a lot of negative news currently circling the GBP/USD, and the comments by European Central Bank (ECB) President Trichet that the ECB may hold Interest Rates steady in the near future may lend further support for the EUR. Also signals from the Bank of England show a potential rate cut in the future for Britain. Last week the EUR/GBP briefly hit an all time high, very close to a 1-1 trade parity. Yesterday the pair ended the day down at 0.9690.

Since the beginning of the financial crisis, the GBP has been one of the hardest hit currencies. The EUR/GBP has risen over 43% since September. This pair could be in line for a correction in the near future, or as some analysts are predicting, could be setting a new standard in the currency market pecking order.

After the Christmas holiday passed, many retail stores were expecting a small reversal to the recent economic slump seen around the world. Post-holiday shopping discounts usually lead to a vast increase in consumer spending. This year, however, the credit crisis and economic recession have consumers worried about home financing and individual savings more than holiday shopping, and retailers are feeling the pinch.

For the first time in decades economists are saying that we are heading for another Great Depression. With stocks continually sliding, sales dropping, and almost all global economies contracting simultaneously, these economists may not be far off with their assessment. It appears the one area left where investors can make money is in forex trading. By bailing out of weaker or lower yielding currencies and buying into safe havens, such as the USD or EUR, thereby driving their value higher, traders can make substantial profits.

The USD appears to have lost strength over the holidays and is now trading near the 1.4200 level against the EUR. Supporting this notion is the weakness of the Dollar against the Swiss Franc, which currently trades below 1.0600. Today’s rising Crude Oil prices may also indicate a depreciation of the greenback.

As far as USD trading goes, investors would be wise to pay attention to the movement of Crude Oil prices as well as the EUR this week as low volume holiday trading is still underway in the United States with the upcoming New Years celebration on Wednesday night.