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The Sunny Side of the British Pound – May 18, 2010

|Includes: ALT, Blackrock Enhanced Global Dividend Trust (BOE)

The UK’s year-over-year CPI for the month of April has reached 3.7%, which is above the market’s forecast of 3.5%, from 3.4%. The consumer price index or the CPI measures the change in the price of a basket of goods and services in an economy during a period. An increase in this account usually indicates a rising demand in consumption which is of course positive for the economy and the Sterling Pound. You see, a rise in prices general prompts the central bank, in this case – the Bank of England (NYSE:BOE), to tighten their monetary policies. By removing excess liquidity and lessening the supply of GBP in the financial market, the demand for it increases, making its valuation relatively higher. More...

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