Yesterday, the Bank of England vote unanimously to leave the size of its asset purchase plan unchanged at 175 billion pounds and voted to leave interest rates unchanged at 0.5%. This is seemingly good news for the Pound in the near-term, as the currency markets are reflecting this morning with the British pound up vs. other currencies. But what is the outlook for GBP going forward?

Back in August at the BOE, there were some who had wanted even more quantitative easing yet were comfortable with following through with the plans laid out in August, as the September minutes show. So while economic conditions have stabilized just enough to warrant a continuation of policy, is a full blown recovery already underway?

Let’s take a look at a few factors that could “weigh heavily” on the British pound and what this means for other markets as well. So in this regard, we can’t rule out the possibility of further quantitative easing should conditions deteriorate.

But the British Bankers Association (BBA) just reported that loans for home purchases declined from the previous month and missed expectations, a sign that perhaps their economy is not ticking up or that the QE measures the BOE has taken haven’t taken hold yet as tighter credit conditions haven’t sparked an uptick in demand. Should housing demand continue to fall, then this could prolong the economic recovery they are hoping for.

So if housing prices decline as a result of falling demand, then the BOE might just have to deal with deflationary pressures rather than the inflation they are hoping for. This could mean more QE which would put further pressure on the British pound.

However, should the stock market  run out of gas later this year, this could coincide with British pound weakness as a result of sluggish economic growth in the UK. This could be the double-whammy that the stock market Bears have been looking for.

But until that occurs, keep your eyes on the British economy and don’t fight the Fed!

The Forex market has many unique advantages that make it a particularly attractive market for any investor wishing to boost the performance of its portfolio of financial assets:

Lower costs: the foreign exchange market there are no charges for fees or costs of transactions or custody or government taxes. There is no management fees or charges on transfers. Most information (exchange rates, analyzes and forecasts) on the currency markets are available free on the internet. The only fees charged are related to the “spread”, that is to say, the difference between purchase price and selling price.

Opportunities for gains from a rise, as declining: for all positions on the Forex, an investor sells a currency and buying another. Consequently, gains are still possible by betting on the decline or increase of a given currency, without having to bear the risks of selling.

Par exemple, un investisseur qui table sur une baisse du cours EUR/USD (c’est-à-dire une dépréciation de l’euro par rapport au dollar), va vendre de l’euro et acheter du dollar.

En supposant que EUR/USD = 1.3601 (prix de vente de l’euro) alors 10 000 euros = 13601 dollars.

Si le cours se déprécie à 1.36000 alors 10000 euros = 13600 dollars.
L’investisseur a alors gagné 1 dollar sur sa position qui vaut 1/13600 = 0.76 euro.

A very liquid market, open 24/24: with an average volume of trade of about 3 500 billion dollars a day, the Forex is the most liquid market in the world. Open continuously every individual investor can enter or exit the market at any time without worrying about the order book.

A secure market: because of the large volumes traded and non-centralized nature of Forex, there is virtually no risk of adverse effects from the organization’s internal market. A single player can not alone control prices in the long term. Even the powerful governments and central banks are becoming more difficult to influence the market: their actions always have an impact but that tends to diminish over time. The potential for fraud is almost nil, there is no risk of insider trading!
The use of tools available: to start trading Forex, only an Internet connection is required. Before embarking on the adventure, it is still advisable to learn about the various products offered by the market (using the information contained in those datasheets for example!).

The existence of mini-accounts: Forex, you can open mini accounts, that is to say the accounts where the deposit amount is relatively low. Most online brokers offer this option, but it is usually they who decide the minimum amount (not less than $ 100 in all cases). To begin, open a mini account can be a good solution to test its ability to manage fluctuations on the currency markets, and to define its own management rules. Once the reflexes, it is then recommended to start dealing with real currency account higher. Because this gives greater flexibility.

Leverage important investors on the Forex can enjoy significant leverage, allowing some to take positions up to 100 times the value of their deposits. It can significantly increase the potential gains, although leverage too important to be very risky. Leverage is necessary in view of the low volatility of the exchange market, outside times of financial crises and stock market, a 1% change is already a very strong trend for the currency market. Thus, without possibility of leverage, only investors with accounts at less than 50 000 would have a real interest with Forex. Note that leverage is an opportunity for investors to invest more than the value of his account but the use of leverage is any obligation. In addition, the investor is totally free to choose its level of leverage by adjusting the amount invested during the passage of transactions.

A market accessible to all: Because of its method of trading and usability of online platforms for next generation, trading Forex is actually fun and intuitive. No need to be an expert, a little practice and a minimum theoretical knowledge sufficient to deal in this market. In addition, research information immerses you in the heart of the global economy.