U.K. Sees Rise in Tax Revenue

The U.K. is reporting that tax receipts have risen for the first time since September 2008. This news helping ease fears over a deficit related budget crunch in Britain. The improved income is providing a bit of a breather for many who have been worried that the sterling would be undermined heavily in forex trading as a result of high levels of government debt due to economic stimulus measures.

The Financial Times reports on the government debt situation:

The improved government income, which was broadly in line with what the Treasury expected, helped overall borrowing figures to come in above the average forecast among private sector economists that the deficit would be £23bn.

“Adding up PSNB in this financial year to date, chancellor [Alistair] Darling is currently well on course to meet his ... borrowing forecast,” said Colin Ellis, economist at Daiwa Securities SMBC. “As such, he is likely to take some comfort from today’s figures.”

While this good news is helping matters -- at least a little -- in Britain, things are not expected to be as rosy in the U.S. There are still questions about levels of U.S. government debt, and continued spending.

Rangebound Forex Trading Characterizes Overnight on the Currency Market

Overnight, the forex trading was relatively quiet. Small changes were made in most major currencies pairs, but, really, just about everything was rangebound on the FX market.

The euro made very small gains against the U.S. dollar, while the pound lost ground to the greenback. The moves were tiny, though, and little significance has been attached to them.

Indeed, as the end of this holiday week approaches, trading is thin and irregular. There is some optimism that economic recovery will be approaching, and that is pressuring gold prices to a certain degree and expected to help the U.S. dollar. But for now, small movement is all that is expected.