UK funding

Following the U.K. government’s decision not to endorse a proposed E.U. Treaty amendment which would require stricter adherence to fiscal budgets, some analysts believed the decision to be a poor one. Critics commented that it would hinder the Eurozone’s recovery and, ultimately, weigh heavily on the U.K. economy. The Eurozone is the U.K.’s primary trading partner, and many among the E.U. leadership were disappointed and angered by the U.K. veto. However, it now appears that the U.K. government may be back-pedaling, albeit indirectly.

It was recently learned that the David Cameron, the U.K. Prime Minister, is considering the possibility of increasing the country’s contribution to the International Monetary Fund, which would indirectly support the Eurozone’s member states, While not a done deal, as it still must be approved by the U.K. Parliament, insiders say that pressure from other IMF members, i.e., Japan, China, Brazil, etc., which are also seriously considering an increase to their respective contribution amounts, could sway the decision. Analysts believe that if those IMF members that are less directly impacted see the need for increasing their support for the Eurozone’s recovery, it will raise more questions as to why the U.K. does not.

Certainly, France and Germany will appreciate the U.K.’s consideration of an increase, but one must speculate as to whether or not such consideration by Mr. Cameron isn’t just for show? The majority of the U.K.’s Parliamentarians voted against the last request for an increase to the IMF special fund, and many from within Mr. Cameron’s own party vetoed the plan. The circumstances may have changed somewhat, but the sentiment remains generally the same. So if the Prime Minister presents his case and subsequently fails to win approval for an increase, he can still turn to his E.U. counterparts and say he tried.

On the eToro OpenBook platform, traders’ sentiment for the GBP/USD pair, recently trading higher at 1.5438, was slightly bearish. As of the time of this writing, the London FTSE has edged higher, up 0.15% and eToro traders are predominantly bullish. Sterling tradersantosh continues to hold several long positions in the GBP/USD pair, one already turning a profit, while targeting 1.5826.