In for a Penny, In For A Pound(ing)

After an eventful night of revelations, it's apparent that the central banks of Great Britain and Japan are heading in opposite directions in terms of stimulus. Since every trade in the currency market involves pitting one currency against another, this creates an interesting opportunity.

Bank of England head Mervyn King implied that the U.K. economy might slide into recession yet again. King complained of a weak economic recovery combined with above-target inflation. While he stated that additional quantitative easing measures are not off the table, he went on to say that "there are limits to the ability of domestic policy to stimulate private sector demand." My interpretation: with CPI inflation spiking to 2.7% in October from 2.2% in September, the Bank of England won't increase its bond purchase program anytime soon....439 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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