Pound vs Dollar - GBP/USD Daily FX Chart 23rd April 2009

Pound vs Dollar - GBP/USD Daily FX Chart 23rd April 2009

It may surprise you to know that Cadbury Schweppes, purveyors of chocolate and fizzy drinks, are now rated a better insurance risk than UK plc, which really just about sums up the entire economic mess that will have ramifications for decades to come.  To use a confectionery analogy Gordon Brown and his Chancellor are about as useful as a chocolate teapot.  Having watched the Chancellor’s performance live online as he delivered his budget, it did make me wonder whether it is possible to be both alarmed and bored at the same time.  Moving on, what does all this mean for the British Pound and in particular for the pounds to dollars pair?  From a technical perspective yesterday’s down bar hardly came as a great surprise following the budget news although closing significantly lower on the day, it did manage to recover some of the losses later in the session, with the low bouncing off the 40 day moving average, and promptly wiping out Tuesday’s gains.  Weighed down with such a  gargantuan amount of debt it is difficult to imagine what external fundamental factors can possibly create a positive influence  for Cable moving forward, and my only thoughts would be for a dramatic worsening of the US economy, which the numbers at the moment do not suggest, in fact possibly the reverse.  Today’s fundamental news on the economic calendar for both Cable and the US dollar includes the CBI (Confederation of British Industry) Industrial Order Expectations which fell this month coming in at -57 against a forecast of -54.  This is a worsening trend and is based on a survey of over 500 manufacturers who are asked to rate all order volumes and expected order flows for the next quarter, with any number above zero indicating an increase and any number below zero denoting a fall.   The market’s reaction to these figures was to issue two headlines, as follows:  “UK Business Confidence Stabilises” from the FT and “UK Manufacturing Demand Crashes” from Economy News.  Both are correct but have managed to place a completely different spin on the same information, the first has looked at the past 3 months and the second has looked at the last 9 months.  Meanwhile I have covered the fundamental news for the US dollar on my eurodollar site.  My trading suggestion for today is actually to step aside but should you wish to try to take some pips I would advocate caution as the currency pair are trading in a very congested area and sandwiched between all the moving averages.

You can keep up to date with all the latest fundamental news, latest currency news and live currency charts by simply clicking the relevant links.  In addition I also provide details of an excellent and innovative ECN broker.