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Realistbear

Recovery Locked In As Pound Approaches 1.60

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$ = 1.59205

Euro =1.20837

Confidence in the Pound is sending our currency forward at a record pace. Will a HPC derial it given that our entire banking sector relies on debt creation to keep going. Has our 4-5TR deficit been totally ignored? Or is the Pound simply the flavour of the month regardless of the fundamentals (Elephant in the room).?

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I hope it keeps going up for a weeks yet as I'm off on holiday next week. Can it crash the end of August please.

People seeking to move out of the dollar while they wait and see what the Fed will do next week?

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I hope it keeps going up for a weeks yet as I'm off on holiday next week. Can it crash the end of August please.

People seeking to move out of the dollar while they wait and see what the Fed will do next week?

The Fed will stay on hold IR-wise as they really cannot go lower. Manufacturing is up in the US but it has so far been a jobless recovereh meaning that the recovereh is fragile at best.

We, on the other hand, are in the same boat with a much larger government deficit and a jobless recovereh (if the 0.1% growth can be built upon).

The dramatic rise in the Pound may cause Merv to comment on the need for us to be competitive and that the trade balance gap may get worse as our currency rises against both of our main trade partners.

We may peak in the high 1.60's but beyond that seems a stretch unless the Koalishon really do have a plan that will reduce the deficit and at the same time maintain growth--a true miracle that would be.

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The Fed will stay on hold IR-wise as they really cannot go lower. Manufacturing is up in the US but it has so far been a jobless recovereh meaning that the recovereh is fragile at best.

We, on the other hand, are in the same boat with a much larger government deficit and a jobless recovereh (if the 0.1% growth can be built upon).

The dramatic rise in the Pound may cause Merv to comment on the need for us to be competitive and that the trade balance gap may get worse as our currency rises against both of our main trade partners.

We may peak in the high 1.60's but beyond that seems a stretch unless the Koalishon really do have a plan that will reduce the deficit and at the same time maintain growth--a true miracle that would be.

Lots of talk in trading circles of the Fed potentially going for a new round of QE - that is there percieved way of 'going lower'

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Look at what companies are reporting over here earnings wise. Has there been a truly bad set of results from anybody?

Every day its the same , reporting better than expected earnings.

Perhaps people think the £ is better value than the $?

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Many of the inflationistas were saying the pound would keep going lower.. driving inflation by making imported materials and goods more expensive. They never expected that the pound would be rising.

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Look at what companies are reporting over here earnings wise. Has there been a truly bad set of results from anybody?

Every day its the same , reporting better than expected earnings.

Perhaps people think the £ is better value than the $?

This may be true--perception is reality. So far there has been almost no fall out from the Koalishon's austerity program--not a single job lost that you would know about. Our exports are apparently down but how does that impact anything short term? Our housing market, and this is the bigee, is stable even though the Haliwide have been reporting what are really insignificant drops (what is happening on the ground is unreported).

So--is it a false perception driving Sterling or has the Koalishon really saved the economy without having done anything yet--which means we must owe Brown a HUGE apology.

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This may be true--perception is reality. So far there has been almost no fall out from the Koalishon's austerity program--not a single job lost that you would know about. Our exports are apparently down but how does that impact anything short term? Our housing market, and this is the bigee, is stable even though the Haliwide have been reporting what are really insignificant drops (what is happening on the ground is unreported).

So--is it a false perception driving Sterling or has the Koalishon really saved the economy without having done anything yet--which means we must owe Brown a HUGE apology.

So when is the austerity going to start exactly? We are burning through £3bn a week but yet the whole process seems to be in no hurry.

One thing is for sure Merv is going to have a big job on his hands come Thursday trying to talk down Sterling. Looks like the UK can have its cake and eat it, high house prices and a strong currency.

So many reasons to emigrate, so few to stay...

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The relative prosperity of the UK at the moment, was caused by the weak pound.

Its new found resurgence, will put a stop to that. You only need to look at some of the economic woes in the US, to see what will happen to the UK if our currency appreciates in value too much. It isnt pleasant over there, things really are bad.

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$ = 1.59205

Euro =1.20837

Confidence in the Pound is sending our currency forward at a record pace. Will a HPC derial it given that our entire banking sector relies on debt creation to keep going. Has our 4-5TR deficit been totally ignored? Or is the Pound simply the flavour of the month regardless of the fundamentals (Elephant in the room).?

It's the dollar falling, not the pound rising.

There are whispers of more American QE, I imagine that's what's behind it.

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That should keep new foreign buyers from getting interested in UK property. Every little helps.

But sadly will encourage immigrants to cover back over to enjoy the better exchange rate putting pressure back on housing.

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America is bust. It started there. It remains there. they do nothing except spend. manufacturing is up because of the spending. Ipods for every American government worker.

America is eating its own waste product.

simples.

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Guest Steve Cook

The Fed will stay on hold IR-wise as they really cannot go lower. Manufacturing is up in the US but it has so far been a jobless recovereh meaning that the recovereh is fragile at best.

We, on the other hand, are in the same boat with a much larger government deficit and a jobless recovereh (if the 0.1% growth can be built upon).

The dramatic rise in the Pound may cause Merv to comment on the need for us to be competitive and that the trade balance gap may get worse as our currency rises against both of our main trade partners.

We may peak in the high 1.60's but beyond that seems a stretch unless the Koalishon really do have a plan that will reduce the deficit and at the same time maintain growth--a true miracle that would be.

Is there any particular reason you choose to spell "coalition" as " Koalishon ".

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I think this is less to do with the Pound and more to do with the Dollar.

We are still only 137 to the Yen, I remember when we almost touched 240.

Dollar is falling against many currencies. The Pound has hardly moved against the likes of the Euro or Zloty

But sadly will encourage immigrants to cover back over to enjoy the better exchange rate putting pressure back on housing.

The pound has been falling for weeks against the Zloty, was over 5, now its 4.8. The rate is linked to the Euro and risk.

As Europe is the UK biggest trading partner the Euro rate is more important than the dollar

Edited by Peter Hun

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We may peak in the high 1.60's but beyond that seems a stretch unless the Koalishon really do have a plan that will reduce the deficit and at the same time maintain growth--a true miracle that would be.

The US recovery is not going as planned as running such a large deficit is going to crush to the private job and growth creation machine of the US economy under a mountain of debt. More monetary loosening will only make the problems worse and things will only get worse until there is a major policy shift.

Reducing our deficit will increase growth not reduce it. There seems to be a fundamental misunderstanding about deficit spending in this country and the media. Public spending cuts free up resources in the private sector that would have otherwise been used as inefficient government expenditure. The cuts free up cash from pension funds, investment and fund managers that would have been spent on guilts. They will invest in private enterprise, corporate bonds etc instead which will create growth.

Cash removed from the Economy via cuts does not disappear from the economy. It is reallocated from inefficient and wasteful government spending to the private sector which should use it more efficiently to create growth. Reducing debt now will massively increase our longer term growth prospects.

Deficit spending only boosts the economy in a situation where confidence is close to 0 and it is necessary to start kick start all forms of spending and investment. This does not apply to our current situation anymore.

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This may be true--perception is reality. So far there has been almost no fall out from the Koalishon's austerity program--not a single job lost that you would know about. Our exports are apparently down but how does that impact anything short term? Our housing market, and this is the bigee, is stable even though the Haliwide have been reporting what are really insignificant drops (what is happening on the ground is unreported).

So--is it a false perception driving Sterling or has the Koalishon really saved the economy without having done anything yet--which means we must owe Brown a HUGE apology.

I wouldn't say that the coalition has done nothing. So far the Tories have talked tough, and there is no reason to suspect they won't act tough. The markets like this. The next test will be the spending review in October, then the actual cuts themselves.

The UK economy is very dependent on the banking sector. I think this sector has less inertia than the manufacturing sector to recovery. HSBC's good results yesterday have probably given the markets some confidence that the UK banks are getting over their problems. This probably means that the government guarantee schemes are looking like less of a black hole.

The potential for the US to QE probably poses some issues. I think the Tories probably don't want to QE because it's seen as a Labour policy, however if everyone else QE's then there is little choice to devalue as well, otherwise the exports will be truly decimated. I don't see how the Tories can lower the value of the currency further without using QE.

As regards trading partners, the UK has signifcant trade with Europe, including Germany. German exports to the Far East are going well, which is good for us.

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The relative prosperity of the UK at the moment, was caused by the weak pound.

Its new found resurgence, will put a stop to that. You only need to look at some of the economic woes in the US, to see what will happen to the UK if our currency appreciates in value too much. It isnt pleasant over there, things really are bad.

Agreed, pound gets higher the whole thing falls apart, its shown that a low currency helps your economy while i high currency goes agaisnt it.

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Agreed, pound gets higher the whole thing falls apart, its shown that a low currency helps your economy while i high currency goes agaisnt it.

It'll probably go down again in a few weeks. Then up again. Then down again. Then up again.

People will think there are deep, fundamental reasons for this happening.

They will be wrong.

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'locked in', now there is a phase that should NEVER be associated with economics. If an economist tells you something is locked in, he/she is talking out of there bum hole...

Oh its RB not a news article, that's seriously spun..

Edited by AteMoose

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It's the dollar falling, not the pound rising.

There are whispers of more American QE, I imagine that's what's behind it.

They are hardly whispers! Shouty shouty, printy printy more like.

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This may be true--perception is reality. So far there has been almost no fall out from the Koalishon's austerity program--not a single job lost that you would know about.

Trust me it's coming RB.

Ask someone you know in the PS what their departmental payrole/budget looks like for next year. Perhaps around here it's unrepresentative, but the stories I'm hearing are not pretty.

It just takes a while to feed through.

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Many of the inflationistas were saying the pound would keep going lower.. driving inflation by making imported materials and goods more expensive. They never expected that the pound would be rising.

... for now.

If you look back over the last few years you can see pound/euro/dollar all fluctuate up and down against each other, though the pound has had the worst time of it overall. Given that the full effect of the devaluation hasn't been passed on by retailers, I don't expect to see its relative recent strength to be passed on either. Instead you'll see them claw back profit that they surrendered by keeping prices pegged instead of raising them as the pound plummeted.

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  • 284 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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