Britain Closer to Joining EU

In an address on French radio European Commission President Jose Manuel Barroso said that the British government was “closer than ever before” to joining the European Union. Barroso stated that many British politicians were considering the move because of the global economic crisis. Despite these statements the British government denies that policies are likely to change in the near future.

Pound Pounded on Forex Markets

Should the British government change policies and join it would have to adopt the Euro as its currency and could cause a disruption in Forex markets. At present the Pound has taken quite a pounding on Forex markets and has provided limited Forex opportunities for traders and investors.

Adopting Euro Unpopular in Britain

Opinion polls suggest that any vote on dumping the Pound and adopting the Euro would be lost and in the UK the Euro has not been a significant political issue for years. During the radio interview Mr. Barroso acknowledged the fact that a majority of the British public oppose joining the Eurozone. Mr. Barroso also said that recent economic uncertainty had made the currency a far more attractive option. While the Euro is down on Forex markets it continues to provide significantly more Forex opportunities than the beleaguered Pound.

In the radio interview Mr. Barroso said “I’m not going to break the confidentiality of certain conversations, but some British politicians have already told me, ‘If we had the euro, we would have been better off’.” I know that the majority in Britain are still opposed, but there is a period of consideration under way and the people who matter in Britain are currently thinking about it.”

Political Opposition to the Euro

The opposition Conservative party opposes the adoption of the Euro. Shadow foreign secretary William Hague stated, “It is extraordinary that certain politicians are whispering to the EU Commission about joining the euro behind the British people’s backs.”

Britain is a country grounded in strong traditions and opposition to adopting the Euro is strong.

A European Commission spokesman stated “Member states would benefit from a country like Britain being in the euro.” The EC has long wanted Great Britain to join the EU and believes that Britain would benefit from adopting the Euro.

Dollar and Yen Strongest Currencies

Despite the economic situation in Britain and the limited Forex opportunities the Pound presently provides, it is very unlikely that Britain will adopt the Euro in the foreseeable future. At the present time the US dollar and the Japanese Yen are the strongest currencies and are providing both Forex traders and investors with plenty of Forex opportunities.

Quick Forex Tip: Political conditions play a major role in global currency trading. Political instability can cause a currency to lose value. Recently political problems and deficit concerns in Greece caused the euro to fall in global currency trading centers. Market psychology although difficult to define can also affect market perceptions and can either help or pressure currencies.