Sterling Moves Lower in Currency Trading

Forex trading with the U.K. pound should consider that the sterling is struggling today. Earlier, the U.S. dollar had moved higher against both the sterling and the euro in forex trading, but things have changed -- at least for the euro.

While the euro is now making headway against the U.S. dollar, the sterling is moving lower in currency trading on the forex market. This is due to the fact that the British economy just can't seem to move out of its funk.

Indeed, even with global equity markets rallying, the sterling remains weak. Government debt and sluggish economic data are pointing to continued difficulties by the British economy, and that is pulling down the sterling. The fact that Gordon Brown is requiring local governments to sell off some of their assets to pay down government debt isn't helping matters, either.

U.S. Dollar Starts Week Higher in Currency Trading

The U.S. dollar is starting this week higher in currency trading on the FX market. This week's start follows on the heels of Friday's bounce in forex trading for the greenback.

Indeed, there are a number of factors leading to a higher U.S. dollar in currency trading. GFT's Boris Schlossberg offers this on why the greenback is bullish today:

The dollar started the week on bullish note rising against all the majors on the back of hawkish comments from St Louis Reserve President James Bullard and some downbeat news from Europe and UK. In remarks made in front of the National Association of Business Economics, Mr. Bullard suggested that inflation may be a greater concern than the market believes despite the wide output gap.

The fact that policymakers in the U.S., and around the world, have spoken recently in support of a strong U.S. dollar is helping matters, since it is clear that, despite calls for another reserve currency, for now the dollar is still preferred.

U.K. Pound Recovers from Some of Its Weakness

The U.K. pound has recovered from some of its weakness in currency trading on the FX market. Earlier today, the sterling looked headed toward below 1.6000 in forex trading. Much of the problem with the pound right now is due to the weakness in global equity markets.

However, the sterling did get a boost in forex trading with a little help from the BP oil discovery made earlier. The announcement that BP has discovered a new oil field in the Gulf of Mexico is providing some help to the U.K. pound in currency trading.

Right now, the sterling is back up against the U.S. dollar in currency trading.

Economic Data Could Provide Basis for Higher U.S. Dollar

Economic data being released today could provide the basis for a higher U.S. dollar on the currency market. The U.S. dollar forex trading forecast has been linked to risk a great deal in the past months since the global financial crisis.

Right now, there is speculation that economic data will soon be showing some concerning information about where we are headed. GFT's Boris Schlossberg reports on FX360 about the focus today:

In North America today, the focus is on ADP employment report with markets anticipating a -250K print. Although the ADP numbers has been notoriously spotty in matching the NFP results, any material deviation from consensus could still produce a meaningful impact on equities and risk FX. Yesterday’s sharp drop in stocks suggests that traders are beginning to have second thoughts about the recovery trade and if today’s ADP data disappoints we could see an acceleration of risk aversion flows as the day progresses.

So far, the U.S. dollar has been mixed in forex trading. The greenback is down against the pound, but up against the euro. Right now, gold prices are moving with the U.S. dollar against the euro in forex trading. Gold is gaining as safe haven investments become popular again.