UK Forex Market is a fundamentally strong
foreign exchange market of the United Kingdom. This market is very much dependent upon the economic condition of the country. The policy matters taken by the government affects the
UK Forex Market significantly. If the economy of UK is strong and is going gaga then it is evident that the demand for
pounds, domestic currency of UK, around the world would increase. This will make the currency to appreciate. Hence, the health of the
UK Forex Market would be good. It has been observed that on the last day of July in the year 2007, the
British pound has appreciated with respect to the
US Dollar. The factor that is playing a very important role to this end is the expectation of the traders of a rise in the
repo rate by twenty five basis points. The traders differ in the expectation level of repo rate hike and their general perception is hovering between the rate 5.75 % and 6.25 %.
One of the factor that is pushing up the
British pound with respect to
US Dollar is rise in the consumption of the domestic consumers. The sales figure of the retail sector in the month of July, 2007 reveals that it rose by a significant percentage of 18 % on a year-on-year basis. This increase has even surpassed the hike in the rate of retail sales in the month of June, 2007 of seventeen percent. The
British pound is going so strong that the exchange rate of it in relation to the
Euro is also appreciating.
But the knowledgeable traders are becoming a bit cautious about the
UK Forex Market due to the expectation that the government is on the move to tighten the economy through the regulation of the monetary policy. Thus, this rally in the
UK Forex Market is expected to slow down in the coming days.
