April 22, 2009
Thank You Darling!
Alistair Darling today delivered his budget which revealed the full extent of the distressing state of the UK economy. Government borrowing is now at £175 bn whilst by 2013 total debt will probably be around 79% of GDP, and who's to say it won't be even more than that because all of their other predictions have been wrong so far. However from a purely selfish point of view, what he did do was deliver one of the easiest trades I have ever made.
A lot of people, myself included, were predicting that the figures that were due to be announced in the budget would be far worse than many experts had predicted and so although I don't normally place these kinds of news-related trades, I thought on this occasion it was worth the gamble.
I went short on the GBP/USD pair shortly before the budget started and was very confident of this trade because the pair had actually rallied strongly this morning from around 1.4520 to around 1.4650 shortly before 12.00 so it was possibly due a fall anyway. It was almost as if traders had pushed the price higher so that we could all jump on board with short positions because the whole scenario worked out perfectly.
True enough the public borrowing figures and future predictions were absolutely dire and despite an initial rise, the GBP/USD fell sharply soon after these announcements. I had opened a short position at 1.4633 with a stop at 1.47 and a target price of 1.45 and thankfully my target was hit fairly quickly.
If only all trades worked out this way. Anyway if you are a fellow Brit and want to check out exactly what was included in today's budget, you can read all about it by clicking on the following link: