Sterling Regains Footing in Currency Trading

The sterling is regaining its edge in currency trading on the forex market today. After falling back on news that the Labor Party is turning in a rather dismal performance in Britain, the U.K. pound is now rising against the U.S. dollar in FX trading.

Sterling has broken throught he 1.6000 mark on the forex market and appears to be heading higher. It will be interesting to see where the U.K. pound goes from here, and whether it will be able to hang on to its gains. It will also be interesting to see whether the euro manages to recover from its retreat in forex trading on the news that center-right parties are winning the day in European elections.

Economies Could Be Ready to Turn Around

For a few months, economists have been keeping a sharp eye out for signs that a bottom has been reached in the recession. Global economies, especially those associated with the Organization for Economic Co-operation and Development (OECD), have been measured to find out if they are improving. After last week's large amount of mostly positive economic data in the U.S., there are hopes that the recession has reached its low point in the world's biggest economy.

However, there are signs that other economies are improving as well. The Financial Times reports on the hope that a trough in the recession has already been reached:

“It is still too early to assess whether it is a temporary or a more durable turning point, “ the OECD said. But the data “point to a reduced pace of deterioration in most of the OECD economies with stronger signals of a possible trough in Canada, France, Italy and the United Kingdom.”

Twenty-two out of the 30 OECD countries are now seeing a rise in forward-looking measures of activity. The US saw its first improvement in the outlook since July 2007, while Germany and Japan – both among the worst hit economies in the developed world - saw an improvement in their outlook for the first time since early last year.

An improvement in economic outlook should bode well for many economies, and it is likely to help currencies like the euro, pound, Aussie and kiwi improve in forex trading on the currency market.

However, it is important to realize that even with these positive signs and the optimism being felt by some economists right now, there is a possibility that global economies could slide back into signs of recession. It's been a bumpy ride toward economic recovery so far, and things are not likely to get much easier before this is all over.

European Elections Help the U.S. Dollar Gain Ground in Currency Trading

European elections are taking place right now, and they are actually providing some support for the U.S. dollar in currency trading on the FX market. The greenback is higher than the euro in forex trading right now, with EUR/USD slipping below the 1.4000 mark again.

Uncertainty over the path of Europe's economic stimulus efforts are causing a bit of a halt to some of the recent gains made by the 16-nation currency. Center-right parties in Europe are showing well right now as delegates to the European Parliament are elected. In Britain, the Labor Party has been experiencing its worst performance since 1918. (Although the pound is regaining some of its losses.)