LONDON, July 26, 2012 /PRNewswire/ --
As the UK slumps to its longest double-dip recession in more than 50 years and the sterling plummets in line - how will you trade forex?
Below, we look at the latest news out of the UK and show how you can take a position on 37 currency pairs - including those affected by the UK recession - with a forex trading account from City Index.
'Worst Double-Dip Recession in 50 Years'
On Wednesday, 25 July, the Office for National Statistics' report showed that the UK recession has deepened, with the latest figures showing that the output of the economy fell by 0.7% between April and June.
The bigger-than-expected contraction (expectations were for a 0.2% fall) follows a 0.3% drop in Q1.
Focus is on the construction sector as the main cause of the slowdown, with the Queen's Jubilee weekend and bad weather also being taken into consideration - although analysts are not yet sure of the true effect these factors have had.
Data has also revealed that manufacturing was down 3.1% during the second quarter, construction fell 9.7%, and the services industries were up 0.7%.
Sterling Plummets following Report
Following the report, GBP/USD fell 80 points - falling from the 1.5500 resistance.
However, news that UK GDP had fallen for the third straight consecutive quarter only affected sterling trading - whilst euro and the Australian dollar both held their own against the US dollar in early morning trading.
How to Trade Forex as Sterling Depreciates
Through a City Index forex trading account, you can trade across 37 major and minor currency pairs for only a small initial deposit.
Using Wednesday's example when the GBP/USD depreciated by 80 points, you could have gone short and sold with the potential to profit as the GBP depreciated against the US dollar.
However, if the GBP/USD was to appreciate - you could also go long and buy with the potential to profit.
It is important to manage your forex trading risk as there is potential that you could incur losses greater than your initial deposit, if the market moves against your position.
Start Trading Forex
To start trading forex across a range of trading platforms - including mobile and tablets - you can apply for a forex trading account through the City Index website.
Read More Forex Trading Tips
If you found this article helpful, you may want to read more just like this. You can access a range of forex trading tips, guides and articles through the Forex Trading section of the City Index website.
About City Index:
Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform.
As a group, we transact in excess of 1.5 million trades every month in over 50 countries. We provide access to a wide range of instruments including margined foreign exchange, CFDs and, in the UK, financial spread betting.
We constantly look to improve the performance of our platforms and expand our range of services. The result is our customers benefit from innovative trading tools with transparent pricing, competitive spreads, and a high standard of customer support. Visit http://www.cityindex.co.uk for details.
Spread betting, CFD trading and forex trading are leveraged products which can result in losses greater than your initial deposit. Ensure you fully understand the risks.
SOURCE City Index