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ZeroSumGame

Weak Sterling Will Deliver Uk Surplus

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It actually meant to say EUR=0.9GBP and will fall to 1EUR=0.84GBP with pound to strengthen against the euro

Paribas certainly expect a return to parity as it says.

But if the Goldmine is quoted correctly - what do they know that I don't ?

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Who to believe.. GS or BNP.

Instinctively I have to say I least trust GS.. they are probably just fishing for someone to buy the otherside of their trades :rolleyes:

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Who to believe.. GS or BNP.

Instinctively I have to say I least trust GS.. they are probably just fishing for someone to buy the otherside of their trades :rolleyes:

Personally I'd trust GS as far as I could throw an elephant.

I'm just wondering if anyone can see what the (ulterior) motive is ?

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Paribas certainly expect a return to parity as it says.

But if the Goldmine is quoted correctly - what do they know that I don't ?

The Euro is clearly overvalued and thats probably what they see and dont bank on a real rise in Stearling and the blog from Artimis on the HPC front page makes a clear case regarding stearlings weakness.

A weaker pound does help reduce the trade deficit more to do with people unable or unwilling to pay for more expensive imports rather than the help to the exporters since the manufacturing industry has almost all been exported.

My views

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Hi

The article is saying Goldman Sachs expect the pound to rise against the Euro:

Goldman expects the pound to strengthen by about 8pc to €0.84 over the next three months. It closed yesterday at €0.9035. This contrasts with warnings from BNP Paribas that sterling is on the cusp of another crash, with euro parity in sight by early next year.

The predicted exchange is 1.19 ie £1 buys €1.19 up from the current ~ €1.10 ( Calculated as 1 / 0.84 )

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The Euro is clearly overvalued and thats probably what they see and dont bank on a real rise in Stearling and the blog from Artimis on the HPC front page makes a clear case regarding stearlings weakness.

A weaker pound does help reduce the trade deficit more to do with people unable or unwilling to pay for more expensive imports rather than the help to the exporters since the manufacturing industry has almost all been exported.

My views

The Artemis article is about as gloomy as I've read in a while. So Littlewood reckons a visit to the IMF could still be on the cards in 2010. :ph34r:

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i think its possible. it is true that going into the crisis with a strong crisis and allowing ourselves to devalue 20%+ must of helped a hell of a lot. surely to go into a crisis like this overvalued. i still think long term average could be 1.25

britain is pretty fecked but europe has problems. germany needs to bail out the PIGS.

the inability to devalue (strength) could lead to euro taking the global hedgemony role just as it could lead to a deflationary depression for all . (or somewhere inbetween!)

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Tea leaves vs. chicken entrails.

As in ..................it's anyone's guess depending on wind direction ?

If we get back to 1GBP=1.25EUR as in my guess of other threads, then I'll be happy.

Edited by RockingHorse

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