Pound gaining on the Euro - V slowly

A snowHead

Boredsurfing,
Was watching the drop just after (yet another) little oik was "elected" (?) to rule our once great land. - que a bit of Elgar and our own great E'nry

A snowHead

Colin B, yup.

Well, the person's real but it's just a made up name, see?

You need to Login to know who's really who.

'Enry surely wink

Anyway, snowHeads is much more fun if you do.

looking at the exchange rate today I think the title of this thread should be changed. Down from 1.18 when I was on holiday in Aug to 1.11 today

You'll need to Register first of course.

Micheal B,s site TMS is 1.2318 for oct/nov today.

Then you can post your own questions or snow reports...

chrisb, 1.15 at Thomas Exchange Global, no commission, no minimum but it is in London

After all it is free

http://econometer.org/ Note for non market readers that comments are v USD:

Sterling is oversold just a little but the longer it stays on a weakening trend the more the current level becomes normal thus erradicating the oversold status, potentially opening up a further weaking of sterling which implies a tourist rate heading towards 1.06 and potentially thru parity to around £1.00 = 0.95-0.98 € by 2012: I think this is more likley than sterling strengthening towards 1.35. On a PPP basis I'd argue for a long term value of around 1.2500 without factoring in the enormous productivity gap between the UK and France/Germany with Eastern European economies also likley to gain significantly from cheap labour, inward investment and rising productivity from new technology over the medium term.

Jivebaby, I follow what a lot of these experts say, and they change like the wind. I believe sometimes they say things for people to rely upon and then have opposite investments when it all turn the other way

*Ski* the Net with snowHeads

in the major currency markets, it's a race to the bottom and only the eurozone is not participating:

http://www.forbes.com/2010/09/23/renminbi-berlin-japan-intelligent-investing-euro.html

snowHeads are a friendly bunch.

rayscoops, I'd agree with you one most of that other than perhaps challenging the concept that in terms of FX that there ae any experts at all! I've spent 30 years trading on and off and I'd confess there are few things harder to predict than a sterling exchange rate with any degree of accuracy especially if you take out a time factor -Without that, whatever the prediction, there's a fair chance that they will all, within reason, be proved correct if you allow enough time.

For me, I have, for me a substantial Euro investment which I need & plan to liquidate in the medium term, but meanwhile my Euro income has temporarily ceased so need to provide the odd bit of funding until circumstances change. I regard myself as an experienced professional, but not an expert! If my opinion/prediction proves accurate then perhaps the expert badge could be polished, but I'm sure that I'll have made a lot of aoher bad decisons along the way, like buying euro's ealier today and selling BA and BP calls this morning Cool

snow reports

arghh not good, was going to order some euros on crown currency at the rate of 1.235 but that deals now gone, will have to keep an eye out for another as the current rates not amazing

Yes TMC is showing 1.15 later today over 1.23 this morning.

You know it makes sense.

Jivebaby, a short while ago the experts were predicting Euro parity with the Dollar by christmas - may still happen if the Eurozone fiscal cuts puts the Eurozone in to recession the way that has already happened in Ireland, and may happen in UK wink

Otherwise you'll just go on seeing the one name:

Very unlikely. That is, depreciation in the event of a recession, rather than the likelihood of a recession itself. If a contraction is avoided (actually, postponed), it will be by creating large amounts of currency (QE), which will depress the value of a unit of the currency.

A snowHead

laundryman, I am not sure what you are actually saying, but there is no intention on the part of Eurozone counties to extend any QE, and infact I do not think Ireland could technically facilitate QE based upon their current financial status.

I am not really talking about depreciation in the normal sense of ecomomics, I am suggesting a crash in the currency if certain Eurozone (individual countries) banking and financial systems come under destructive pressure, and Ireland is not far off that at the moment. Glad I do not have any sheckles in AIB and the like

A snowHead

rayscoops, I'm saying that (for any country/currency zone), increasing the money supply is more likely to depreciate the currency (by definition, really) than a recession.

Well, the person's real but it's just a made up name, see?

laundryman, hypothetically maybe, but which Eurozone counties are likely to increase the money supply ? and just because one event (QE say) is more likely to depreciate the currency than another event (recession), it does not preclude the other event from causing depreciation of the currency too.

I can see very little increase in the money supply happening, but I can see recession happening - so do you think this mixture of events would cause a depreciation in the respective currency ?

You need to Login to know who's really who.

Anyway, snowHeads is much more fun if you do.

rayscoops,

You'll need to Register first of course.

Jivebaby, but ECB is talking about withdrawing its support for the Euro by way of a phasing out of its unlimited lending facility (by letting the rolling 3 month support option expire) that has supported banks from weaker economies (much like UK government has support in place for Barclays even though they never borrowed) and if this happens then a few Euro banks will need funds or fail; it follows that of banks fail the euro will weaken against other currencies

Then you can post your own questions or snow reports...

After all it is free

But what's going on with the Swiss Franc? 1.49 to the £1 ??

Painful!!

under a new name,

Safety haven Gold, Chf etc : There's a very strong opinion which has been arguing for quite a period that with virtually every major OECD country practising QE in one form or another, either supplying banks with liquidity/cheap funds which are then recycled into Tbills/.....budget deficits we are to a large extent storing up inflation and ipso facto devaluing nearly all currencies by default; hence the strong and enduring strenght of Gold and to an extent equities which are currently enjoying a bout of optimism supported by profits, real and forecast and dividend yields and as a store against future inflation.

For Gbp/chf, you need to look more closely at th Eur/Chf rate which is trading at 1.33, recently went below 1.30 a couple of times down to 1.2850 territory. Logically with a strong/er Euro in the last week or so some some of the safe haven pressure has been released from the Chf.

The SNB really aren't too keen to see the franc this strong but the Swiss seem to be coping with the strain quite well. GBP apart from a UK pespective is largely irrelevant. Thus the Gbp/Chf rate is largley due to a strong Eur/Weak Gbp

*Ski* the Net with snowHeads

1.155 WTF?

snowHeads are a friendly bunch.

Boredsurfing, Have a feeling that will look good in a few days, especially when the Irish problem is reduced - the problem there of course are the close trade links with the UK and the Euro seems to be shrugging off bad news: Been out all afternoon and I'm wondering what disrupted the equity markets around 14:52 or so when they topped out pre-empting a 2% fall after/before what appears to be a string of good news: This change may forewarn that market sentiment is now looking for bad news discounting good news, the reverse of the past few weeks, if so the FX markets have led the way and the ride could get bumpier. Unfortunately my sell orders were just above where markets topped Embarassed

snow reports

Jivebaby, My concern is solely that my French council tax is due to be paid soon Toofy Grin

Boredsurfing, fortunately, I decided to start paying mine monthly last year, so there will only be a small balance to pay when the bill finally arrives, and the money is already in Euros. Will need to transfer some to pay for the ski passes though

You know it makes sense.

My 1.2493 looking pretty good now. (Smug smiley)

Otherwise you'll just go on seeing the one name:

A cheap pound is good for business; the FTSE 100 has done reasonably well over 3 months. The government will aim to keep the pound cheap for quite some time yet with at least the prospect of quantitative easing, I think.

A snowHead

achilles, agreed - and most countires are trying to keep their currencies competitive to stimulate exports and internal industry, Japan stepped in and tried to stop the Yen from strengthening maybe 3 times over the last month or two. Unless you are really at the top of the financial industry then guessing what will happen is simply just that - a guess Very Happy

A snowHead

Michael B, Hats off dude Cool

achilles, rayscoops, Sorry I disagree: IMO that is an historical socialist myth and a discredited doctrine: Embarassed

In contemporary times succesful exporters of the last 50-60 years or so have benefited from strong currencies. Switzerland, Germany, China and still strghthening desspite the US rhetoric, Japain, Taiwan, Korea, Australia, Canada.....It's hard to think of any sucessful exprting economy that has a weak currency. The sad thing is that some people in the UK actually beleive that hogwash and as a country that been decling in manufacturing terms for 50 years or so as a net importer of goods a weak cuurency only widens our current deficit. The UK can hardly compete as a tourist destination with mainland Europe so that one doesn't flaot the credibility boat either. Watch India, Brazil, Mexico too:

In another 20 years looks at the success stories again and I'll bet my house the overwhelming track record will provide unchallengeable evidence that a strong currency is best in every way.

Well, the person's real but it's just a made up name, see?

Jivebaby, China pegged its currency at a very low level to the Dollar, and USA have been moaning about it for years Puzzled

Low/cheap and weak are two different concepts imv

You need to Login to know who's really who.

Jivebaby, I think you're right, particularly in say, Switzerland which has few natural resources. Strong currency means cheap imports/inputs (other than labour and we're reasonably self sufficient in food). Make your exports the things that HNW folks will pay anything for (prestige, quality, service, knowledge) ((NB that is NOT services in the UK sense) and you're away to the races.[/u]

Anyway, snowHeads is much more fun if you do.

rayscoops, china was firmly pegged for decades as is the HKD which was engineered to provide monetary stability for SAR. Malaysia currently has a fixed ccy to limit speculative flows and may middle eastern ccy's are also tied. The downside is that they lose monetary control which can create some issues when the USD moves considerably. I have in the past suggested to a couple of central bank governors that dollarization would help their economies but ultimately most countries for political, national and historical or dare I say emotional reasons hang prefer to hang on to their national currency. Sometimes at huge costs, inflation, unemployment, ultra high interest rates with rapidly depreciating currencies etc. The list can be long and shocking for those that haven't been on the ground to see how badly this affects people in their daily lives. This just doesn't happen when a curreny is too strong as this is usually measured in percentages of overshooting etc, never chronic. I've spent many years in emerging markets as an illiquid markets specialist, hence my comments are both from personal and professional experience. wink

You'll need to Register first of course.

rayscoops, China was firmly pegged for decades as is the HKD which was engineered to provide monetary stability for SAR. Malaysia currently has a fixed ccy to limit speculative flows and many middle eastern ccy's are also tied. The downside is that they lose monetary control which can create some issues when the USD moves considerably. I have in the past suggested to a couple of central bank governors that dollarization would help their economies but ultimately most countries for political, national and historical or dare I say emotional reasons prefer to hang on to their national currency. Sometimes at huge costs, inflation, unemployment, ultra high interest rates with rapidly depreciating currencies etc. The list can be long and shocking for those that haven't been on the ground to see how badly this affects people in their daily lives. However this just doesn't happen when a currency is too strong as this is usually measured in percentages of overshooting etc, never chronic. I've spent many years in emerging markets as an illiquid markets specialist, hence my comments are both from personal and professional experience. wink

Then you can post your own questions or snow reports...

After all it is free

Anyone remember that story about a huge bet that the pound would be above 1.20 or something in a few months time? They can't be too happy.

achilles, Are you saying that you fridge is filled with local/UK produce because import are too expensive/UK goods relatively competive.?

Q = Do you drive a UK made/built car and run it on horse manure, use skis manufactured outside of the UK or basic stuff like toothpaste, toilet paper etc? Just a thought:

The contents of your almost certainly foreign manufactured fridge are more likely to be locally produced wherever you live and that's not always down to the exchange rate, but again how much of your budget really goes on stuff which is 100% Uk sourced. even you central heating will use gas from Norway! The Uk will continue gettting poorer if our currency continues weakening and nearly everything we have/use/do apart from eating will come from outside the UK, and even then fruit, meat etc are largely EU sourced Embarassed

*Ski* the Net with snowHeads

Jivebaby, bottom line is that my employer is manufacturing successfully and taking on extra staff because our product is competitively priced thanks to a low £. I am grateful every day.

Help!!

Pound gaining on the Euro - V slowly

snowHeads Forum Index >>> The Piste