Will Gordon Brown Doom The Pound?

Last updated 6/4/2009 8:33 AM ET (GMT -5) 0 Comments - Add your comment

Forex Trading involves high risks, with the potential for substantial losses and is not suitable for all persons. Past performance is not necessarily indicative of future results.

Boris Schlossberg

Director of Currency Research, GFT

Rumors of PM Brown resignation dropped the pound for 200 points in a matter of minutes in early North American trade today and although they were denied by UK policy makers the damage to the currency was done.  

Prime Minister Brown whose administration has been besieged by a corruption scandal, has resisted calls for a resignation. However this week four of his cabinet members have resigned prompting calls for an early election.  Some polls now carry Labor, which has governed UK for more than a decade as third behind the Conservative party and Liberal Democrats.

The disarray in the UK government is clearly having an impact on the pound and if the Brown administration does not establish some sense of control relatively soon, the loss of confidence could push the pair below the 1.6000 level as traders focus on political risks rather  the improving UK economic picture.

Loading...

About The Author

Boris Schlossberg began his Wall Street trading career more than 20 years ago at Drexel Burhnam Lambert. There, he traded nearly every type of financial product on the market in the U.S., from equities and options to stock index futures and foreign exchange. His innate ability to analyze market information and use it to trade has helped him become an industry-recognized, “go to” trading professional.

These days, whenever the markets move, many organizations turn to Schlossberg for his take on the situation. He is a weekly contributor to CNBC's Squawk Box and a regular commentator for Bloomberg radio and television. His daily currency research is widely quoted by Reuters, Dow Jones and Agence France Presse newswires and appears in numerous newspapers worldwide. Schlossberg has written for publications like SFO magazine, Active Trader and Technical Analysis of Stocks and Commodities. He is also the author of Technical Analysis of the Currency Market and the co-author of Millionaire Traders: How Everyday People Are Beating Wall Street at Its Own Game with Kathy Lien. He joined GFT in 2008.