Wednesday, Jun 03, 2009
Dead cat bounce of a currency
BBC: Why is the pound rising?
Economists are fantastically good at explaining currency movements - they can give you at least four for any particular change. What they're bad at is predicting them. Academic studies have found that complex economic models for forecasting exchange rates are precisely as reliable as tossing a coin.
Posted by peter_2008 @ 01:05 PM (1038 views) Add Comment
7 Comments
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1. crunchy said...
Is the pound rising or merely retracing, now @ approx 50% on some other currencies. We will know in a couple of months maybe.
If it keeps foreign investors away from the UK property market and helps keep a lid on inflation I am OK with it.
Let's not get too obsessed with flucuations. The market is a strange beast, but if you have been long pound for the past month or so,
blindly following the market has put dosh in your pocket. What more can you ask from it!
2. charlie brooker said...
Maybe investors are buying the pound in readiness to buy gilts, by way the of equities, when interest rates inevitably rise.
3. japanese uncle said...
Current GBP position in the currency market seems based on fictitious green shoot theories, etc. I don't know. One thing is certain. If or rather when UK seeks help from the IMF, GBP will devalue by at least 30% at a stroke.
4. Jimmylad said...
wonder what the people who advised us all to get out of sterling are doing now ?
the dollar shafted the pound & now its the pounds turn to shaft the dollar.
same as it ever was
5. alan said...
....Because people see that a profligate government is at the end of its tether?
Goodbye Blears and Smith....take your friends with you.
6. Yoss said...
Much easier to put through unpopular taxes and massive spending cuts in early days of a new government with a huge majority.
7. techieman said...
its funny...... looks like a key reversal day today. i have a high of 1.6660 and we are now back down to 16300 - thats a big turnaround. Dollar is stronger all round but £ is moving up against the Euro too. Have we seen the highs in the GBP or will this just be a shakeout?
Techie whats a key reversal mate? Well the definition can be a bit controversial but basically its a new high i this case followed by a reversal that closes near the low. If it gaps open higher then thats good, if the range and volumes on that day are big thats pretty good too. Cast iron? - and it has been know to have key reversals followed by more key reversals - recent S&P action dictates that BUT the key will be the pattern and extent of the retracement back toward the highs...