Strompy Posted June 10, 2009 Share Posted June 10, 2009 Wednesday during early deals, the British pound soared to a new multi-month high against the yen and new multi-day highs against the currencies of US, Europe, Switzerland as positive economic reports from U.K. showed that the economy is on the road to recovery. Why? One forum expert has predicted that the pound will plummet to 0.70USD. Yet it has risen 1.64USD. Why? Globilisation? Quote Link to comment Share on other sites More sharing options...
the_austrian Posted June 10, 2009 Share Posted June 10, 2009 There is no reason to think that a strengthening pound points to a recovery, unless a falling property market also indicates recovery. The only meaningful way to measure the strength of an economy is to look at living standards, there isn't a number that we can make go higher and we will all be rich. Quote Link to comment Share on other sites More sharing options...
EssKay Posted June 10, 2009 Share Posted June 10, 2009 Why?One forum expert has predicted that the pound will plummet to 0.70USD. Yet it has risen 1.64USD. Why? Globilisation? Take a look at the 3yr and 5yr charts and you'll see a completely different picture. Against most major currencies we're still waaaay down > 30% for most of them All we're seeing is a bounce back from historic lows - not too surprising given that pretty much EVERY major economy is suffering Quote Link to comment Share on other sites More sharing options...
Steamerpoint Posted June 10, 2009 Share Posted June 10, 2009 There is no reason to think that a strengthening pound points to a recovery, unless a falling property market also indicates recovery. The only meaningful way to measure the strength of an economy is to look at living standards, there isn't a number that we can make go higher and we will all be rich. It's fair to say that things could be just as bad or worse elsewhere and that is why the currency is strengthening agaist other currencies. Currency investors may feel more confident keeping their money in Sterling at the moment especially while other economies are reluctant to put there cards on the table and make public just how bad things really are. Only this week, there was a call to the European banks to admit their losses & exposure, which they still haven't done. At least here, most of the damage has been done and we know just how bad things are and it's really bad, but it's reasuring to investors that they can see the risks and manage them accordingly. I believe that the Eurozone is the next big casualty on the horizon. The cracks are showing everywhere! To be fair, USA is in danger again too! What a mess! Quote Link to comment Share on other sites More sharing options...
Wimbledon88 Posted June 10, 2009 Share Posted June 10, 2009 It was oversold and is just reclaiming lost ground. Also, when the stock markets are up, the pound, like the euro, is a currency that gains. It still has much potential for appreciation, but expect it to drop again like a stone when the recent stock-market gains grind to a horrible stop. Right now, I would say the euro is overvalued and sterling is undervalued. It is sometimes hard to remember that almost every developed nation with a fiat currency has something horribly wrong with it. Quote Link to comment Share on other sites More sharing options...
Mega Posted June 10, 2009 Share Posted June 10, 2009 No one is more shocked than me by this, i suspect £ are being bought to pay off debt by someone. Gordon got a lot of crap over the falling £, therefore one is wondering WHY he not shouting about its climb? Mike Quote Link to comment Share on other sites More sharing options...
Guillotine Posted June 10, 2009 Share Posted June 10, 2009 The strengthening pound is the fulcrum upon which our double dip recession will hinge. The economists suggest that manufacturing growth, which was in great part, a function of the weak pound, will lead to improved GDP figures. However, the service part of the economy is collapsing and the strengthened pound will choke off the prospect of a continuing manufacturing recovery. Fourth quarter 2009 will be disastrous. imo. We could see sterling back in the 1.90s before the end of summer. Mind you I put two £uid on England winning 8-nil tonight, dyor. Quote Link to comment Share on other sites More sharing options...
ralphmalph Posted June 10, 2009 Share Posted June 10, 2009 No one is more shocked than me by this, i suspect £ are being bought to pay off debt by someone. Gordon got a lot of crap over the falling £, therefore one is wondering WHY he not shouting about its climb?Mike One posible reason is that multinational British companies are repatriating foriegn currencies into Sterling to take advantage of the best rates to do this for almost 8 years. It can add 30% to 40% to thier profits. Same thing drove the dollar higher at the onset of the financial crisis. The US multinationals were worried about funding so they repatriated foriegn reserves into dollars meaning that the fed had to issue dollars to foriegn central banks at a unprecedented levels. Quote Link to comment Share on other sites More sharing options...
ralphmalph Posted June 10, 2009 Share Posted June 10, 2009 The strengthening pound is the fulcrum upon which our double dip recession will hinge.The economists suggest that manufacturing growth, which was in great part, a function of the weak pound, will lead to improved GDP figures. However, the service part of the economy is collapsing and the strengthened pound will choke off the prospect of a continuing manufacturing recovery. Fourth quarter 2009 will be disastrous. imo. We could see sterling back in the 1.90s before the end of summer. Mind you I put two £uid on England winning 8-nil tonight, dyor. Uk manufacturing had to compete on a global stage with rates at 2 to 2.10USD to the pound for 2 to 3 years. so 1.90 is still a 5 to 10% increase in thier competitive position. Also Oil and commodities are priced in dollars so in your case thier input costs decrease as well so they win both ways. No wonder you put 2 quid on Engerland to win 8 nill. Quote Link to comment Share on other sites More sharing options...
HAMISH_MCTAVISH Posted June 10, 2009 Share Posted June 10, 2009 One forum expert has predicted that the pound will plummet to 0.70USD. Yet it has risen 1.64USD. Why? You've answered your own question. Clearly he was no expert at all. This website really should come with a financial health warning. Quote Link to comment Share on other sites More sharing options...
50%deposit Posted June 10, 2009 Share Posted June 10, 2009 ohhh goody more dollars for me now if interest rates would only go up i could start collecting my free money again Quote Link to comment Share on other sites More sharing options...
Deckard Posted June 11, 2009 Share Posted June 11, 2009 Take a look at the 3yr and 5yr charts and you'll see a completely different picture. Against most major currencies we're still waaaay down > 30% for most of themAll we're seeing is a bounce back from historic lows - not too surprising given that pretty much EVERY major economy is suffering Exactly right, been saying this for some time now. Even at current levels the £ is pricing in A LOT MORE BAD NEWS than the Eurozone. JCT and Angela M just keep trying to sweep their huge problems under the carpet. It won't work. Watch this space. Quote Link to comment Share on other sites More sharing options...
Kyoto Posted June 11, 2009 Share Posted June 11, 2009 (edited) Sterling has reached its highest level against the euro since the start of the year after data suggested the UK recession may be over. http://news.bbc.co.uk/1/hi/business/8094729.stm What I don't understand is why, despite our recklessness as a nation, Sterlng is holding up, the indicies never fell past 2003 lows, and much of the world appears to be in a more desperate situation than us right now. Our medicine must be coming our way, surely? Edited June 11, 2009 by Kyoto Quote Link to comment Share on other sites More sharing options...
Deckard Posted June 11, 2009 Share Posted June 11, 2009 http://news.bbc.co.uk/1/hi/business/8094729.stmWhat I don't understand is why, despite our recklessness as a nation, Sterlng is holding up, the indicies never fell past 2003 lows, and much of the world appears to be in a more desperate situation than us right now. Our medicine must be coming our way, surely? Discussed here earlier today http://www.housepricecrash.co.uk/forum/ind...howtopic=116840 Quote Link to comment Share on other sites More sharing options...
Pindar Posted June 11, 2009 Share Posted June 11, 2009 Gordon fixed it. Quote Link to comment Share on other sites More sharing options...
Laura Posted June 11, 2009 Share Posted June 11, 2009 Our medicine must be coming our way, surely? Oh yea of little faith. This is the miracle economy, from NuLabour. You can write reality here if you wish, but it wont be good for your soul, so just let the spinning lunatics prevail. Don't fight the machine. Quote Link to comment Share on other sites More sharing options...
50%deposit Posted June 11, 2009 Share Posted June 11, 2009 http://news.bbc.co.uk/1/hi/business/8094729.stmWhat I don't understand is why, despite our recklessness as a nation, Sterlng is holding up, the indicies never fell past 2003 lows, and much of the world appears to be in a more desperate situation than us right now. Our medicine must be coming our way, surely? woo hoo!!!!! good news. now all we need is for Brown to get run over by a bus and my day is made. Quote Link to comment Share on other sites More sharing options...
three pint princess Posted June 11, 2009 Share Posted June 11, 2009 Does this mean imported inflation will fall, so QE can be increased further? If the currency can take it then stressing it further shouldn't hurt. http://www.statistics.gov.uk/cci/nugget.asp?id=199Published on 10 June 2009 at 9:30 am The UK’s deficit on trade in goods and services was £3.0 billion in April, compared with the deficit of £2.7 billion in March (originally published as a deficit of £2.5 billion). The surplus on trade in services was £4.0 billion, compared with a surplus of £3.8 billion in March. The deficit on trade in goods was £7.0 billion, compared with the deficit of £6.5 billion in March (originally published as a deficit of £6.6 billion). Exports rose by £0.1 billion, while imports rose by £0.7 billion. The deficit with EU countries was £2.9 billion in April, compared with a deficit of £3.1 billion in March. Exports rose by £0.4 billion but imports rose by £0.1 billion. There was a rise in exports of chemicals. The deficit with non-EU countries widened to £4.1 billion compared with the deficit of £3.4 billion in March. Exports fell by £0.3 billion and imports rose by £0.5 billion. There was a rise in exports of oil, offset by a fall in exports of capital goods. There were rises in imports of consumer goods other than cars, and aircraft. There was a fall in imports of oil. Excluding oil and erratic items, the volumes of exports and imports were both three per cent higher in April than in March. Export prices fell by two per cent compared with March, and import prices fell by one per cent. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted June 11, 2009 Share Posted June 11, 2009 I dont think the pound is soaring, I think the others are falling....DOLLAR: huge QE and debt EURO: large debts at banks, Eastern Europe, two broken countries. Quote Link to comment Share on other sites More sharing options...
Wimbledon88 Posted June 11, 2009 Share Posted June 11, 2009 woo hoo!!!!!good news. now all we need is for Brown to get run over by a bus and my day is made. And then for a passing motorist to reverse over him three times just to be sure. Quote Link to comment Share on other sites More sharing options...
Zzzzzzzzzzzzzzzzzzzzzzzzzz Posted June 11, 2009 Share Posted June 11, 2009 (edited) BBC emphasis - pound rose because the recession is ending. http://news.bbc.co.uk/1/hi/business/8094729.stm Reuters emphasis - pound rose because of rising inflation expectations. http://www.reuters.com/article/usDollarRpt...B51992020090611 Edited June 11, 2009 by gruffydd Quote Link to comment Share on other sites More sharing options...
Wimbledon88 Posted June 11, 2009 Share Posted June 11, 2009 I dont think the pound is soaring, I think the others are falling....DOLLAR: huge QE and debt EURO: large debts at banks, Eastern Europe, two broken countries. No, you will see that it is not because of euro weakness, as the euro continues to do well against the greenback. It is just recovering lost grounds. That's all currencies do, go backwards and forwards. But I am surprised at this continuous rise against the euro. You would expect some retracement. Or are the poisons finally hatching out of the mud (copyright RB) in the Eurozone? Quote Link to comment Share on other sites More sharing options...
nohpc Posted June 11, 2009 Share Posted June 11, 2009 I wouldn't call it soaring rather than correcting. The pound was worth 2 dollars and 1.50 euros not that long ago remember. Quote Link to comment Share on other sites More sharing options...
Jin Posted June 11, 2009 Share Posted June 11, 2009 Does that mean we're not going to hear anymore "Cash rich foreign buyers taking advantage of the weak pound to snap up properties cheap"? hope so - it was starting to irritate me Quote Link to comment Share on other sites More sharing options...
Markie6 Posted June 11, 2009 Share Posted June 11, 2009 It's just correcting, although Real Madrid have just put a buy order in for £80 mill lol Quote Link to comment Share on other sites More sharing options...
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