Pound Gains on Friday

On Friday the Pound gained on both the US dollar and the Euro as Forex brokers anticipated that the Pound’s weakness would be discussed at last weekend’s G7 Meeting in Rome. Strong performances by global equity markets had Forex brokers and investors taking advantage of the Forex investment opportunities offered by higher yielding currencies. Investors were also nervous that currency market volatility would be addressed particularly the weakness of the Pound and the strength of the Japanese Yen.

Risk Aversion Still Dominant

The slight return of risk appetite Friday had Forex brokers taking advantage of forex opportunities available in global currency markets. While risk aversion has dominated forex markets throughout the global economic crisis even the slightest return of risk appetite has investors snapping up any and all forex opportunities.

China to Have More Flexible Exchange Rates

G7 conference attendees promised not to resort to protectionist measures as they strive to boost their economies. The move by China towards more flexible exchange rates was complimented and the currency could provide investors with forex investment opportunities. A statement released by the G7 conference stated, “The G-7 remains committed to avoiding protectionist measures, which would only exacerbate the downturn, to refraining from raising new barriers.”

China May Power Global Recovery

China stopped pegging its value to the US dollar in 2005 and the new policies will allow the Yuan to appreciate and possibly provide forex investment opportunity. Many nations have accused China of manipulating its currency to gain an advantage in global trade. Since 2005 the Yuan has gained 21% against the dollar. Many look to China’

s still thriving economy to power global recovery.

Currency Issues Not Addressed by G7

No other currencies were mentioned in statements by the G7 group and many Forex brokers do not expect a lot of activity in Monday’s trading partially due to the fact that US banks and markets are closed for the Presidents Day holiday.

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