Wednesday, Jan 21, 2009
Sterling on an inexorable slide ?
DAILY WAIL: STERLING FINISHED ACCORDING TO SOROS PARTNER
Sterling plunged to a seven-year low against the dollar today as one of the world's top investors warned the currency was 'finished'.
The pound fell more than two cents to hit a low of $1.3965 as traders reacted to the Government's latest multi billion-pound bailout of the banking system.
It is the first time sterling has dropped below $1.40 since mid-2001 and is on track for its biggest one-day percentage fall against the dollar since late 1992.
Posted by hooray @ 12:17 AM (542 views) Add Comment
7 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. techieman said...
I disagree.... we are down from 2.11 to 1.40 a little bit late to go short in my view, not to say we wont have more falls but I am looking for a bottoming pattern - with gaps and big ranges. Cant decide if its a "v" or a rounding bottom - although i favour the V. At what price ? Hmmmmm thats the tricky part!
2. Crunchy said...
1. techieman
I would not rule out some outside (sterling positive) influence soon. From an American or Euro news event perhaps?
I think it will be a sharp V bottom.
3. str 2007 said...
Techieman
Thanks for coming back on yesterdays link.
We have a few Euros we've been looking to change back to sterling. Nowish is a good time in your opinion ?
Bellwether has mentioned a good HSBC foreign exchange account.
Do you have an opinion on Dollars, Yen or Swiss Francs ?
4. techieman said...
str 2007 - i have been an advocate of the Swiss for a long long time. As for the dollar last year i was short @ 2.03 and got squeezed out of it @ 1.99 - this was my "retirement" trade so i am - to say the least - a little peeved (although i cant blame anyone except me). At that time most of the people here said the dollar was going to be chucked in the bin and the pound would appreciate against it. Oh how things change (i cant remember that french phrase).
I cant "recommend" anything - all i can tell you is what i am doing. Personally i would always have exposure to foreign currencies - I have small amounts of cash in such currencies and then my trades are different. For one reason or another i have a particularly large amount of Euros (hence the hedging). Would i buy more cash currencies at the moment against the pound - nope. Its a bit late to join the party IMO.
That doesnt mean the £ doesnt go lower, it just means that its becoming more and more risky IMO. Volatility on both sides has / will increase.
Re the USD i think that in particular is overbought (against the Euro too), so i think that would probably be the one that capitulates first. At what price? hmmm thats a tough one - i think we need to see some $ topping patterns first.
5. str 2007 said...
Thanks techieman
Perhaps I should put my efforts into inventing a time machine so I can pop along to 2011 check things out and the pop back and arrange things accordingly !
6. techieman said...
One thing i would say str2007 - i hedged some of my Euros and was looking for a top at around 8150 to hedge some more. Now obviously that was wrong with a capital W. I am only saying this to be humble - I am often wrong. The way the market hit 8150 i decided not to hedge around there but did hedge near the top just before the new year (often wrong sometimes right).
We can all be wrong - what matters is how much we (traders) make when we are wrong compared to how much we make when we are right. So at the end of the day if you want to buy into other currencies it depends whether you are speculating / hedging and are ready to be wrong.
What you will find is most speculators (and indeed journos) go very quiet about things when they are wrong. Even here there was just before Christmas everyone going on about Euro £ parity, now (for the moment) thats gone quiet - no-one on here said look at Sterlings counter-trend rally. That is just people for you.
Whatever you decide (and it is your decison) i wish you luck and dont over-expose yourself. As we discussed for example i am long of calls on the FTSE, now its around mid 4000 at the moment, so i could have taken a position today rather than yesterday and bought the calls cheaper. Or not bought them at all. The trade may make or may lose money (its obviously losing at the moment) but i am comfortable taking it and if it goes belly up it wont really affect me.
7. str 2007 said...
Very honest input techieman.
Yes the main concern is preservation of savings and perhaps re-make the loss in interest. I know it could be strongly argued that Sterling savings for a UK property is a no brainer and why take any other risk ?
Equally I'm seeing that that arguement I used 6 months ago looks increasingly like the wrong one, in terms of more diversification would have protected my savings better.
For arguements sake due to currency fluctuation the option of moving to Europe has been taken away ( or made 30-50% more expensive) this maybe a good thing but still makes me feel I should have done more.