The currency and equity markets are turning lower after a strong rally on Tuesday. In my Daily Currency Focus, I talked about the 3 reasons why the currency market rally was suspicious. None of the reasons for Tuesday’s jump delivered real solutions. The market only rallied because Bernanke delivered no surprises. President [...]

The British pound hit a high of 1.4605 this morning after falling to a low of 1.4137 yesterday. Although we have a mild improvement in risk appetite that is helping to propel the GBP, CAD, AUD and NZD higher, 2 stories making the wires are responsible for the volatility in the British pound. Story #1 [...]

Since the inception of the credit crisis, perhaps no currency has been beaten down more than the British Pound, with analysts bitterly divided about whether the currency will fall further. A lot depends on whether the British efforts to save its devastated banking sector are successful. The government has already moved to nationalize the Bank of Scotland, and is quickly moving to shore up the capital positions of other vulnerable banks. Experts point to the Pound's historic volatility, however, as an indication that investors have always fled, and will continue to flee the UK in times of uncertainty. Jim Rogers, whose partner George Soros famously "broke" the Bank of England in 1992, forecasts a bleak future, although his motives are questionable. Ultimately, the fate of the Pound is entirely relative, as is the case with all currencies. In other words, if investors suddenly changed their minds about the perceived stability of the Dollar and Yen, the Pound could quickly recover. Business Week reports:

As investors begin to renew their focus on the problems of other economies, the pressure on sterling may ease. The selling could turn to buying if investors suddenly decide they'd rather take a little risk to earn return, rather than watching their cash evaporate.

Read More: Playing a Rebound in the Pound

The Euro and British pound are selling off aggressively today on the heels of comments from government officials and market players. Risk aversion has been a theme in the markets following the weaker than expected jobless claims and durable goods report from the US (read my full insight on these numbers at FX360.com) [...]

There has been a lot of volatility in the foreign exchange market this morning, driving currencies to historic levels: GBP/USD - 23 Year Low USD/JPY - 13 Year Low NZD/USD - 6 Year Low EUR/JPY - 6 Year Low CAD/JPY - 13 Year Low GBP/JPY - Record Low NZD/JPY - 8 Year Low The most significant moves have been in the British pound, [...]