It was reported today, that the Office for National Statistics released revised UK economic numbers. Gross Domestic Product fell by 2.4% in first quarter, surpassing projections of economists, which called for 2.1% contraction. That was supposed to be a correction to the original 1.9% figure. This new number makes for the worst quarter to quarter decline in GDP since 1958. However, compared to a year before, the drop was 4.9%, the biggest since records keeping started in 1949.
While the numbers are grim, not everything is that bad. While the Pound sold off on the news, it had reached 1.6745 level against USD. This is the highest quote since October last year. GBP has been on an impressive rally this years, in spite of all the bad news and the “nay” sayers, like Jim Rogers, whole in January boldly declared that UK had Nothing to sell. He has been a little of target so far.
Others are more optimistic about UK’s future. Rating agency Fitch, maintained its top triple A rating on UK’s sovereign debt. That’s despite the economic contraction reported today. Farther more, Fitch’s announcement is opposite to a relatively recent negative outlook by S&P. We will have to wait and see if S&P changes its view soon – it is not often that rating agencies disagree in cases of national debt. As for me, I think Pound will appreciate more in a foreseeable future.
My trade in in CAD-JPY didn’t reach its target, but I managed to sqeeze a few pips out of it.
Canadian Dollar was still lagging about 12 hours ago, not showing any strength. Other Yen pairs started to top out, so I closed this trade for 37 pips. Market made another run later one and it was possible to get out with another 30 pips, but I was already done. At any rate, minor gain.
I will stay with the loonie, but move to another pair, EUR-CAD.
I moved my sell order to 1.6235 and wait for a break. This time the target is less ambitious than was intended before, but the nature of market moves changed, too. So, if this trade is filled, most immediate objective would be 100 pips. If this is reached, will look for another trade in the same direction. Should this cross keep climbing, the sell order will be adjusted accordingly.
Mike K.
What is it, Mike? You don’t like Jim Rogers and are trying to stick it to him? Stupid bowties, right?
Yeah, the bowties are awfull!
But his buddy, Soros, got it right. Couple of weeks after you started buying Pound he stopped being bearish it. I think that he didn’t get bullish, but didn’t see any more down potential and covered his shorts.
No silly bowties there!
[...] when major numbers, like GDP, have been revised. This happened recently in US and United Kingdom officials corrected GDP figures last year, too. So we shouldn’t be surprised any more that this is happening. Perhaps the only lesson [...]