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Tomcat

One More Sterling Bounce...

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Is Sterling going to see another sizeable bounce in the next few months or is there nothing else going for it? I just can't see where the good news is going to come from.

I have worked for 6 years, saving approx 60-70% of my net earnings every month by living with my parents. All this with a view to putting a deposit on a house.

I have decided that I don't want to buy a house anymore and have gradually moved approx 50% of my savings over the last 6 months into USD/CAD. I should have been more aggressive, especially in November when the pound was over $1.65.

It seems house prices were the only thing holding Sterling up last year and it pains me to say that I would like a small 3-4 month bounce in property prices just so that I can totally get out before the pack of cards really comes crashing down.

Consistent MoM falls as seen a couple of years ago will kill sterling, something that RB eluded to a couple of months back when it fell sharply on the release of the January Halifax (or was it Nationwide?) figures.

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I used to want house prices to fall, now i'm more concerned about what my savings will be worth next year when the cuts start taking effect and house prices start falling.

If there is a bounce it won't be much i feel.

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Is Sterling going to see another sizeable bounce in the next few months or is there nothing else going for it? I just can't see where the good news is going to come from.

I have worked for 6 years, saving approx 60-70% of my net earnings every month by living with my parents. All this with a view to putting a deposit on a house.

sounds like me except I've been working ten years saving up to 80% over the last 5. I'm still planning to buy. What's your plan then? Emigration?

I don't think rising house prices will effect sterling now. Rising interest rates probably would.

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sounds like me except I've been working ten years saving up to 80% over the last 5. I'm still planning to buy. What's your plan then? Emigration?

I'm not considering emigration in the short term, although after a couple of years I may reconsider depending on the state of the UK.

I realised during the spring bounce last year that house prices will be propped up at all costs and moved in a way to protect my savings. I've seen so many posts on here about how house prices have crashed in Gold/USDs/Euros but not in Sterling and felt that I couldn't risk not diversifying my savings.

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Knowlegable poster on here ' Tamara de Lempicka' reckoned Stirling was a buy below 1.46 US.

Goldman Sachs allegedly long on Stirling.

I cant find a reason to be optimistic for Sterling myself, howeverI Im not prepared to gamble now.

If Sterling goes down houses go down unless you are planning to buy prime property.

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What's your usdcad starategy, trade a bit of fx too

I have been reasonably lucky so far by buying at the right time. Lowest USD/CAD rates i've bought at were $1.585 and $1.645.

The current state of affairs has forced me to into "trading" both FX and silver but I really didn't want to do it and now I face the dilemma of whether I should try and crystallise the gains I've made. It does stress me out as I now check the currency markets on daily basis. The only consolation is that I would probably have been more stressed had I bought a house.

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Knowlegable poster on here ' Tamara de Lempicka' reckoned Stirling was a buy below 1.46 US.

Goldman Sachs allegedly long on Stirling.

I cant find a reason to be optimistic for Sterling myself, howeverI Im not prepared to gamble now.

If Sterling goes down houses go down unless you are planning to buy prime property.

I have been short sterling on serveral occasions up to and after the election. I can't see any reason why it's a buy at the moment. Never try to catch a falling knife.

Although be greedy when others are fearful and all that...

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Hey Tomcat,

What's your usdcad starategy, trade a bit of fx too

Sterling is Targeting $1.37USD in the next couple of months - it has been for a few months on the charts. It may have a small bounce on the way. The 2 factors which will save the pound is a credible plan to cut the deficit to something which results in a medium term reduction in the total national debt AND a gentle rise in interest rates. Labour's plan to cut the annual deficit in half over 4 years leaves a national debt of £1.4 TRILLION that cannot be serviced, much like Greece faces now. So that will not be sufficient. The markets are not yet sure whether the Coalition has the guts to do what is required to prevent this end game. They make the right noises but that's all. The ECB attempt to save the Euro is odds on to fail - it's means countries like Greece borrowing more when they cannot pay their current debts. That is not actually credible.

House prices will be falling by the late autumn. In the meantime, the USD will be a good bet along with the Swiss franc and the Norweigian Krona. If there is a crash in the markets, the USD will rise quite substantially against Euro and Pound as USD is seen as world reserve currency. In the short term a fallout of shares and other assets will put upward pressure on the USD. After that it would then likely fall quite sharply. I favour hard assets like gold and silver/platinum/palladium. Most gurus believe the whole overborrowed west will not get away with bail out followed by new rescue package, all invloving yet more borrowed/printed fiat currency.

I do not own almost any pounds and absolutely zero Euros at present.

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Sterling is Targeting $1.37USD in the next couple of months - it has been for a few months on the charts. It may have a small bounce on the way. The 2 factors which will save the pound is a credible plan to cut the deficit to something which results in a medium term reduction in the total national debt AND a gentle rise in interest rates. Labour's plan to cut the annual deficit in half over 4 years leaves a national debt of £1.4 TRILLION that cannot be serviced, much like Greece faces now. So that will not be sufficient. The markets are not yet sure whether the Coalition has the guts to do what is required to prevent this end game. They make the right noises but that's all. The ECB attempt to save the Euro is odds on to fail - it's means countries like Greece borrowing more when they cannot pay their current debts. That is not actually credible.

House prices will be falling by the late autumn. In the meantime, the USD will be a good bet along with the Swiss franc and the Norweigian Krona. If there is a crash in the markets, the USD will rise quite substantially against Euro and Pound as USD is seen as world reserve currency. In the short term a fallout of shares and other assets will put upward pressure on the USD. After that it would then likely fall quite sharply. I favour hard assets like gold and silver/platinum/palladium. Most gurus believe the whole overborrowed west will not get away with bail out followed by new rescue package, all invloving yet more borrowed/printed fiat currency.

I do not own almost any pounds and absolutely zero Euros at present.

Interesting.

Why would the USD go up if the DOW goes down big time ? Im not confident about any equity market, and Im not alone in that view surely.

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Interesting.

Why would the USD go up if the DOW goes down big time ? Im not confident about any equity market, and Im not alone in that view surely.

Flight to safety.

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I have been reasonably lucky so far by buying at the right time. Lowest USD/CAD rates i've bought at were $1.585 and $1.645.

The current state of affairs has forced me to into "trading" both FX and silver but I really didn't want to do it and now I face the dilemma of whether I should try and crystallise the gains I've made. It does stress me out as I now check the currency markets on daily basis. The only consolation is that I would probably have been more stressed had I bought a house.

CAD like AUD or NZD has done really well. Fundamentally, the economy is is great shape, the BoC is moving into a hiking cycle, the banking sector is fine etc etc. Problem is that trades like short EUR/CAD or short GBP/CAD have become very consensus on the street. I've observed twice in the last fortnight that when we have had a major risk off move, EUR/CAD has gone up sharply, indicating heavy positioning. Also oil is starting to get hit lower by the market since fiscal tightening from Europe/UK is not good for demand, a clear negative for CAD. Valuation wise CAD is looking expensive on most crosses.

Ask yourself would you add to your long in CAD at these levels? If not then i'd think about scaling out of some. If it goes higher then fine, you make a bit less but you still make money and if it goes lower you hae at least taken profit on a proportion. Being "fully in" on a position tends to be stressful since you are limiting yourself to only reducing.

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Is Sterling going to see another sizeable bounce in the next few months or is there nothing else going for it? I just can't see where the good news is going to come from.

I have worked for 6 years, saving approx 60-70% of my net earnings every month by living with my parents. All this with a view to putting a deposit on a house.

I have decided that I don't want to buy a house anymore and have gradually moved approx 50% of my savings over the last 6 months into USD/CAD. I should have been more aggressive, especially in November when the pound was over $1.65.

It seems house prices were the only thing holding Sterling up last year and it pains me to say that I would like a small 3-4 month bounce in property prices just so that I can totally get out before the pack of cards really comes crashing down.

Consistent MoM falls as seen a couple of years ago will kill sterling, something that RB eluded to a couple of months back when it fell sharply on the release of the January Halifax (or was it Nationwide?) figures.

For four or five years, each Monday, at our group WIP meetings, the bank's currency and interest rate strategist would come and give us a short presentation regarding what the pound and the dollar would do and how interests rates would move.

And, after four or five years, I began to realise that these people had no more idea than I did, which is not very much. The only, and I mean only, insights they provided related to who had what position in the market from a put / sell point of view. If they saw a lot of contracts looming as the rate changed, they'd tell us that and as the rate approached and breached that figure you'd see movement.

So, you need to know who has what position in the market. Easier for the small, open economies like the AUD where buying a couple of jumbo jets can move the rate.

Other than that, it was all sorry wet finger stuff.

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  • 259 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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