Wednesday, Oct 22, 2008
Pound Devalued - More to come
FT: Pound plunges as King warns on recession
but good news - The age of innocence when banks lent to each other unsecured for three months or longer at only a small premium to expected policy rates will not quickly, if ever, return, he said.
Posted by andrew @ 01:54 PM (1309 views) Add Comment
22 Comments
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1. andrew said...
Posted a simillar question earlier.
Could someone please explain, why if the Pound has lost value against the Dollar, has it gained in strength agains the Polish Zloty and Australian Dollar at exactly the same time but the Russian Rouble has also grown in value. Have all Currencies just lost value as the Dollar has temporarily strengthened, but Sterling has lost less ?
2. techieman said...
And the pound is lower against the Euro and swiss franc. But the swiss franc is higher against the Euro and the Euro is lower than the Dollar and........ Andrew if people REALLY KNEW why then they would be trading the currency markets. The pundits will give you a reason but the real reason is there are more buyers than sellers.....now why are there more buyers than sellers????? Ask the buyers. Im not being facetious it just you need to give up concentrating on the fundementals. Some of them are priced in, some arent.
3. techieman said...
Actually that needs to be amended slightly... "Andrew if people REALLY KNEW why then they would be trading the currency markets". Should be "Andrew if people REALLY KNEW why then they would be trading the currency markets SUCCESSFULLY".
4. Fjcruiser said...
People are dumping the pound for good reasons. the UK is f+++++
5. andrew said...
You are saying that these changes are more or less random. Currency trading is huge. We can all see why Sterling may be loosing value fast, but there is a reason as to why the Russian Ruble is suddenly shooting up in a matter of days and why the Australian dollar and Polish Zloty have nose dived. These are not minor shifts, but along the lines of 10 - 15 % in the last few days hardly a random shift in the world of currency trading.
I just threw up the question, in case someone had an answer. I just find it a little odd that at the same time that Sterling effectively devalues, so do other currencies in tandem. This does not seem random but orchestrated.
6. techieman said...
Andrew - No i am not saying they are random at all. Most markets discount stuff, so currency moves discount news that is yet to happen... this is basically what people cant get their head round. Stock markets for example are leading indicators which is why they can go up during recessions but go down before one hits. SO while sometimes trying to pin moves on fundementals is ok more oftern it just doesnt work. Look up technical analysis : eg. http://www.investopedia.com/university/technical/techanalysis2.asp
7. sold out said...
Techieman
Do you know how to set up a savings account in the UK, that allows you to hold a mix of currencies. I understand that HSBC have something, do you or anyone have any advise on this?
8. planning4acrash said...
Cripes, all the central banks cutting in unison a few weeks ago, stating that it was orchestrated, and people still ask whether currency moves are manipulated! Just coz the telly set doesn't say it don't mean it doesn't exist! Nobody can think without tv
9. planning4acrash said...
Back to Australia. I keep making the point that they lost more manufacturing and took on more debt than the UK. Also, recession means less demand for the raw materials exports Australia relies on, less demand for Polish exports. This is bad news.
10. techieman said...
sold out - no i dont know sorry.
I have a fair few currencies including a few Gambian whatever they are from some hols!! But seriously though i have Euros (sold quite a few v. pound) and quite big positions in cash Swiss and a much smaller cash Dollar position no yen and some smallish trade positions in Cross rates - Euro / $ etc. [those cross rates are all quite small im not really active in Forex]. I have a large amount of the Swiss in a Canton bank but the $ here (not very much really). Did have a very large trade in $ v £ @ 2.03 but was squeezed out at 1.99 [feel pretty stupid now to be honest re that! but thats how it goes sometimes].
11. planning4acrash said...
The way I see it, its 50/50, manipulation to buck trend in short term whilst govt and connected reposition, bigger fall when it comes. No time for public to react. Gold kept low whilst Paulston buys it, for example. This is our corrupt world.
12. techieman said...
p4ac - I doubt if a fall of 6 cents v $ is orchestrated... would brown really want a sterling crisis? No i doubt it. The markets have decided a la Soros that we are due for some downside and i would think the cross rates are going to be very volatile. In any case much the same way as the markets have hit the banks one by one, i wouldnt be surprised to see the currencies targeted. Orchestrated perhaps....but from where? Think the G boys would be silly to try to stop the movements now... waste of money but when the Pound is very oversold expect to see a bear squeeze.
13. techieman said...
p4c - my 11 crossed with yr 10 - in any case am off out now.
14. Palejo said...
Andrew polish zloty was artificially overvalued in last year
15. planning4acrash said...
Brown wants Euro Parity. The north American Union is why US, Canadian Dollar and Mexican Peso are on trajectory towards parity. Check out the charts tiecheman! Aus dollar tanking towards other pacific economies on a longer term plan.
16. techieman said...
p4c - all i know is this. When everyone on here said the US$ was f***ed i bought it..... as i said im not into Forex much - but i will take on board yr comments. Parity with the Euro... hmmm yes ive heard this argument before, and you may be right but im sure even if thats what Brown wants he dont wanna get there in a hurry and overshoot. In any case, all this http://www.amerocurrency.com/ stuff, well i dont buy it. I also dont buy the £ into the Euro (i think we are way to gingoistic as a country so unlikely to have a politician (esp one whose on the rack) take us in. I sold @ near the 8150 high and then was looking for a double top if it gets there again the you are probably right we are likely to go through it by a margin.
I will take a look at the charts but the Loonie is well for loonies in my book!
17. planning4acrash said...
Techieman. You are behind the curve. As I've mentioned, regions are on regional or defacto regional currencies. What do you think the tri-lateral commission is all about?! Its about a tri-polar world. They are now openly trying to merge the tri-polar world that has been evolving, hidden in plain sight.
18. techieman said...
p4ac - you have your opinion and i have mine - thats a debate. As to whether or not i am behind the curve thats fair comment in your opinion. There are lots of smokescreens in the press and internet ive given you the link to the Amero to show my awareness but really its all a bit fantasy island for me....If the Euro has proved one thing its that you cant adjust the economy using one of the most important determinants - i.e. the ROE. The problem is that while the EC could get to a stage where political union makes sense economic union means that the countries in the union must be homogeneous. Clearly (and i have said this since the start) they are not. Spain and Ireland based on housing bubbles, Germany and France not - to simplyfy things. So my point is yes they may think its a good idea to have this, and maybe just maybe at the end of this and to find a way out they might just do something along those lines (if all economies are shot then yes they do have a homogeneous base) but for GB to go in? Political suicide - now he may be stupid but he aint THAT stupid! I think if this were to happen there would be plenty of warning anyway, cant really push this through under the carpet.
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