Currency Trading UK

Stock market and price of bonds all rise and fall at the same time or in a similar way. Currency is however a little different.


Currency trading is interesting as the currencies in different countries rise and fall at different times. This is the unique difference between currency trading and stock or bonds trading.

In the UK it is GBP or the pound that is traded against other international currencies like US dollar, CAD, Euro, CHF, JPY, and so on.

The UK government is not much interested in changing over to the euro as euro has different interest rates, although it is prevalent in many other European countries. UK prefers to keep its pound and also let people use the euro.

When for a UK pound one could buy two dollars, then people were very interested to buy products using USD.

Now for a UK pound you get roughly 1.6 US dollars and hence your shopping money in the US is reduced while on travel in the US.

In the recent past US dollar has become weak against most of the world major currencies. Euro is slowly becoming stronger, though currently it is at a low due to after holiday trading and the nuclear tests in Korea.

The pound has been impacted by declining confidence in the credit crunch economy the world over, beginning in the US.

As long as the pound is weak against the euro the cost of holidays in Europe for people travelling from the UK will be high. As pound become stronger against the euro the cost of travelling to the European Union for holidays will reduce.

Currency can be traded in the UK using open and closed funds. The open funds allow you to keep the money in the currency of your choice. The closed fund will have some currencies from where you need to pick one to invest your money.

An investor in the UK is putting his/her money into the currency fund and betting that the particular currency will strengthen against the pound, for them to get a good return.