Chapter 8 – Currency Analysis (Part I)

GBP/USD

  • GBP, Sterling, Cable, or Pound is the official Currency for the United Kingdom.
  • London is the world’s largest financial center, dominated by financial services such as Banking and Insurance. Therefore its currency is also very sensitive to equity market news.
  • GBP/USD makes up about 14% of all Currency traded in the Forex Market according to 2004 study. It is more likely about 10~12% today.
  • GBP is the only one of the major currencies traded in the Forex Market that is not linked in some way to a global Commodity.
  • Therefore, Sterling is susceptible to wilder moves because of the lack of anchors in commodities.
  • Sterling is also more likely to be driven by Market Sentiment.
  • GBP/USD pair is known to make fake moves before London open. The best time to trade this pair is actually after 3:00am. News releases usually at 4:30am. (New York Time)
  • Due to the low liquidity situation during the Asian Session, GBP/USD may appear to be trending in one direction, only to have the entire movement reversed around London Open.
  • London bank traders are known to take profits just around their market open. According to an ex-bank trader that if at the beginning of the day their trades (from the previous day) are already in profit, in order to keep their books in positive standing for the rest of the day, they will take profits and close the trades.

GBP/USD and GBP/JPY are very volatile currencies and are known for their tendency to move in a whipsaw during trading sessions.

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United Kingdom

Central Bank Governor: Mervyn King

Voting Members: Charles Bean, Paul Tucker, Ben Broadbent, Spencer Dale, Paul Fisher, David Miles, Adam Posen, and Martin Weale.

Current Interest rate: 0.50%

United States

Central Bank Governor: Ben S. Bernanke

Voting Members: William C. Dudley, Elizabeth A. Duke, Jeffrey M. Lacker, Dennis P. Lockhart, Sandra Pianalto, Jerome H. Powell, Jerome H. Powell, Jeremy C. Stein, Daniel K. Tarullo, John C. Williams, Janet L. Yellen.

Current Interest rate: 0.25%

 

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About Kelvin Ching

I'm a professional Forex trader and I have been trading for over 7 years. I was a series 3 broker and a registered CTA with the NFA, the main regulatory agency in the United States, and I have been involved at the highest levels in commodity trading. I also have a background in Information Technology, graphics design, and programming... I'm the co-founder of CurrencyNewsTrading.com, a site dedicated to fundamental analysis and news trading.

Comments

  1. Is there any way to get this book in PDF format
    Thank you
    Marat B

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