Friday, May 11, 2007
It's not looking good
Reuters: Sterling falls vs dlr after well-flagged BoE hike
LONDON, May 10 (Reuters) - Sterling hit a four-week low against a broadly firm dollar on Thursday as a widely expected Bank of England interest rate hike to 5.50 percent, coupled with soft UK trade data, sparked a bout of profit taking. At 5.50 percent, UK rates have now overtaken those of the United States, and are the highest among the G7 countries.
Posted by sovietuk @ 08:47 AM (155 views) Add Comment
1 Comment
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1. japanese uncle said...
It is a matter of course, that a market in the midst of an asset bubble attracts speculative monies from around the globe, which cannot help pushing up the exchange of the currency of the country in question. GBP has no underlying strengrh supported by the substancial real economic activities, thus currently subjected to a great volatility. I recall a pound was worth 150-160 yen at the peak of the Japanese bubble, which is worth 240 yen now. 170-180 yen/GBP seems the reasonable rate. Once the collapose of the British bubble becomes something full-scale, GBP may well depreciate easily by 30%. Then people will start wearing neckties made of polyester rather than silk, as they used to do in the early 1990's.