January 25th, 2:24 pm by Barbara Zigah
(eToro Blog) News that the U.K. economy is edging closer to a double-dip recession is putting pressure on the Pound Sterling, which fell against the U.S. Dollar to 1.5581. On the OpenBook, traders are primarily short the GBP/USD. Guru santosh, who is generally very attune to the U.K. economy, only managed to eke out a small gain of 4.5% by closing out one long position; he holds numerous open longs in the GBP/USD pair which are not close to turning a profit. Other traders were quicker in closing out their longs that were in danger of reversing; trader bonychem closed out a long with a 4% gain, but only minutes before that closed another with a 46% return.
The ONS reported that 4th quarter GDP contracted by 0.2% from the previous quarter’s 0.6%, on a quarter-over-quarter basis; a consensus of analysts had forecast a contraction of 0.1%. As compared to the 4th quarter of 2010, GDP rose to 0.8% from 0.5%, in line with the consensus expectations.
Separately, the British Bankers Association reported that mortgage approvals in the U.K. unexpectedly rose to 36.2K from 34.7K, slightly above the consensus forecast of 35.3K. The director of the BBA cautions that although the year ended strongly on December’s numbers, which were 12% higher than December 2010, the household sector remains focused on managing day-to-day expenses and reducing personal debt, and that there is a clear reluctance to allow net borrowing to rise.
Trader skreitz, who allocates nearly 25% of his portfolio to the GBP/USD pair and who looks to be an impressive recent addition to the OpenBook, is currently holding open a long position that already shows a gain of more than 18%. Within the past week, this trader had closed another with nearly a 60% return. For the past three months, this trader is on track to post a 140% gain.
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