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Sterling Bears


davidcameron
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Very quiet this evening in the Forex market - looks like Sterling is holding steady just below 1.59. No doubt we'll see the 1.60 firework go off tomorrow.

If we get some "bad news"* this week it could reach close to 1.70 as momentum to the upside is, IIRC, at a record pace. These kinds of changes usually on occur on the downturns.

I cannot see Sterling much higher than about 1.72 though. From 1.50 to 1.70 in a couple of weeks will be dizzying and not many would have foreseen it.

Its all part of the dying days of the headless chicken that is still stumbling around and right now its staggering in the UK part of the yard and getting lots of attention as the punters look on in awe as they wonder how on earth it keeps going despite no head or sense of direction.

1 GBP =

$ = 1.58867

Euro = 1.20540

_________________

I.e., contrary good news such as another negative HPC report, rising unemployment, widening trade gap, sovereign debt mention or a reminder about the Elephant in the room (the 4-5 TR debt problem).

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Including you.

Mr. Cameron, if that is indeed you - please pay no attention to naysayers and doom mongers you may encounter along your enlightened path to restoring UK prosperity. I for one have every confidence in you.

RB has made some great calls on the dollar and he'll be right again at least once more. But at some point, as we both know, the pound will rule.

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In the meantime, the US is in full recovery mode with every indicator pointing up. Recession was, like, soooo last week muchachos:

Dow Jones Industrial Average( DJI: ^DJI )

Index Value: 10,675.97

Trade Time: 7:55pm

Change: 210.03 (+2.01%)

Not full recovery mode - it is jus the usual dollar down, US US$ corporate profit up, hence US stock price up mode.

Sterling is not that strong, it is USD that has been falling (GBP us just slightly stronger against YEN, EUR, AUD etc)

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Not full recovery mode - it is jus the usual dollar down, US US$ corporate profit up, hence US stock price up mode.

Sterling is not that strong, it is USD that has been falling (GBP us just slightly stronger against YEN, EUR, AUD etc)

And AUD and NZD versus the pound, as well as the CAD and CHF, are the next shoes to drop. There's no way their economies are "fair value" at those exchange rates.

But I see I'm fighting losing battle, so I'll shut up.

Edited to add: Yen too. I know the pound peaked at nearly 250 Yen intra-day, so it's basically halved in value. I'll go with the Japanese democratic party's pledge to restore 2% growth to the economy by April 2011 and suggest a 30% devaluation is on its way.

Edited by AvidFan
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And AUD and NZD versus the pound, as well as the CAD and CHF, are the next shoes to drop. There's no way their economies are "fair value" at those exchange rates.

But I see I'm fighting losing battle, so I'll shut up.

Edited to add: Yen too. I know the pound peaked at nearly 250 Yen intra-day, so it's basically halved in value. I'll go with the Japanese democratic party's pledge to restore 2% growth to the economy by April 2011 and suggest a 30% devaluation is on its way.

Definately No need to shut up, theres always going to be two sides to any market, its good to see a bit of patriotism in the UK and sterling (however misguided i personally think it is over the medium term).

Edited by Tamara De Lempicka
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Definately No need to shut up, theres always going to be two sides to any market, its good to see a bit of patriotism in the UK and sterling (however misguided i personally think it is over the medium term).

Medium term, Id have to agree anyway. And yesterday the forum turned into a mutual appreciation society regarding economic and currency movements, which was nice, if not unusual for HPC.

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Based on elliott wave counting the eur and the gbp are near a top soon. The next leg down will take them a lot lower. when EUR was going down eventually the market had 98% dollar bulls. Now we only have 13% dollar bulls. This measure alone tells me that the USD movement down is close to its bottom. Time to move back in with the USD.

As of today we have 7% USD bulls. I expect the dollar to turn soon. Last time it was at this level was in November 2009.

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And AUD and NZD versus the pound, as well as the CAD and CHF, are the next shoes to drop. There's no way their economies are "fair value" at those exchange rates.

But I see I'm fighting losing battle, so I'll shut up.

Edited to add: Yen too. I know the pound peaked at nearly 250 Yen intra-day, so it's basically halved in value. I'll go with the Japanese democratic party's pledge to restore 2% growth to the economy by April 2011 and suggest a 30% devaluation is on its way.

Yap - opposite views are always welcome (preferably supported by logics). I do agree with you and do expect JPY to fall - it is so overvalued on PPP basis right now and pays 0 interest. Can't see any attraction in CAD/CHF however as those are zero interest currencies.

AUD/GBP spread is 4%, so even if the exchange stays static for 5 years, one would pocet a 20% interest spread (many here are now suspicious of BoE that she is carrying out a ZIRP for an extended period).

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Any word from the sterling bears on this site? Have they gone into hibernation early to nurse their losses? I thought $1.30 and euro parity was a certainty? Do you mean I cannot make investment decisions based on what I read here? Why didn't anyone tell me? :angry:

$1.5867

€1.2109

And where are the Bulls on the way down?

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1.5698

Indeed.

I thought Sterling would have topped a bit higher than 1.60 as the bad news was coming thick and fast. Funny thing, Sterling dropped 3 cents (since Friday's close) on what continues to be bad news.

It will take some solid HPC numbers before we see a big run on the Pound IMO. We stand or fall on house prices.

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Council Dweller - I don't mean to be rude, it's just the juxtaposition of living in a council house and speculating in Yen.

I'm not saying you shouldn't by any means. But it just strikes me the similarity of what went on in Japan when yields fell to the zero and the legendary 'Japanese housewife' then ladened the world with the 'Carry Trade' of all carry trades.

I've no idea what you're talking about. Living in a council house and taking risks makes a lot of sense doesn't it? If I lose it all I'll laugh at myself.

My gamble is that the UK goes bankrupt before Japan.

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Starting with the assumption that Sterling strength is mostly a liquidity mismatch which will be filled either by the reserve in question or through the liquidation of growth sensitive assets - and given index composition being what it is - short FTSE, then, at the turn, short Sterling looks like an easy bet*.

(* I hardly endorse this product and or service)

Well that was pretty much shooting fish in a barrel.

Turn at 5396 on the 3rd, went short GBPUSD at £1.5925 .

Now we just sit and wait for risk stocks to finish liquidating (ie, your exit signal is a trend break in the FTSE).

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