Barclays: Euro Will Soar Vs. Pound And Dollar

[Realistbear]

http://www.bloomberg.com/news/2010-10-01/barclays-revises-pound-forecasts-against-euro-dollar-on-downside-risks-.html

Barclays Revises Pound Forecasts Against Euro, Dollar on `Downside Risks'

By Paul Dobson - Oct 1, 2010 6:58 AM GMT+0100

Print Barclays Plc revised its forecasts for the pound against the euro and the dollar because “short- term downside risks have increased.”

The pound will trade at 85 pence per euro, 84 pence, 81 pence and 78 pence in one, three, six and 12 months, respectively, Paul Robinson, head of European currency strategy in London, wrote in a report dated yesterday.

The Banksters at Barclays are advising us all to buy Euros which will go up vs. Sterling and the $. So much debt, so much sovereign debt crises and all contained so quickly and painlessly. Ireland, Spain, Portugal are all just blips and contained.

Somehow I do not believe it.*

____________________________________

* http://www.bloomberg.com/news/2010-10-01/european-manufacturing-growth-slows-orders-rise-at-slowest-pace-in-a-year.html

Europe Manufacturing Cools as Joblessness at 12-Year High on Hiring Freeze

By Simone Meier - Oct 1, 2010 10:19 AM GMT+0100

Growth in Europe’s manufacturing industry slowed and unemployment held at a 12-year high as a cooling global recovery restrained demand.

A gauge of manufacturing in the 16-nation euro region declined to 53.7 in September from 55.1 the previous month, London-based Markit Economics said today. A separate report showed that the region’s jobless rate stayed at 10.1 percent in August, the highest since June 1998.

Europe’s economy is cooling after growth accelerated to the fastest pace in four years in the second quarter. Manufacturing in Germany eased last month, while it shrank in Spain and Ireland, national reports today showed. The European Commission sees a more “moderate” expansion in the second half as unemployment hobbles consumer spending and governments step up austerity measures to reduce budget deficits.../

In Germany, the manufacturing gauge dropped to 55.1 in September from 58.2, the lowest since January. Italy’s measure also declined, while France’s index rose to 56 from 55.1. .../

The outlook for Europe’s economy is being clouded as investors question the ability of nations such as Ireland and Portugal to handle their fiscal burdens without external aid.

Edited October 1, 2010 by Realistbear

[Bruce Banner]

I don't think I'll buy any more. I'm pretty comfortable holding 50/50 GBP/EUR, which I have done since early 2007.

[South Lorne]

...suggest Barclays will do some hard hedging in the opposite direction ....

[yellerkat]

http://www.bloomberg.com/news/2010-10-01/barclays-revises-pound-forecasts-against-euro-dollar-on-downside-risks-.html

Barclays Revises Pound Forecasts Against Euro, Dollar on `Downside Risks'

By Paul Dobson - Oct 1, 2010 6:58 AM GMT+0100

Print Barclays Plc revised its forecasts for the pound against the euro and the dollar because “short- term downside risks have increased.”

The pound will trade at 85 pence per euro, 84 pence, 81 pence and 78 pence in one, three, six and 12 months

, respectively, Paul Robinson, head of European currency strategy in London, wrote in a report dated yesterday.

That's sterling going UP against the Euro over 12 months, not down...

ED formatting

Edited October 1, 2010 by yellerkat

[Realistbear]

That's sterling going UP against the Euro over 12 months, not down...

ED formatting

Well spotted.

Not sure if this is a good forecast from Barclays--we are going down hard according to the PMI data released about 30 minutes ago. Barclays may have to revise again. On balance, I can't see how the EU as a whole has much to look forward to as it is clearly not all contained. In the race to the bottom to get currency devaluations I think we will win.

[Killer Bunny]

I don't think I'll buy any more. I'm pretty comfortable holding 50/50 GBP/EUR, which I have done since early 2007.

Sell €, buy $. Of course you'll believe this to be a ridiculous suggestion. Of course you will be wrong.

[Tired of Waiting]

http://www.bloomberg.com/news/2010-10-01/barclays-revises-pound-forecasts-against-euro-dollar-on-downside-risks-.html

It is the other way round RB. They think Sterling will go up in relation to both Euro and Dollar.

"The pound will trade at 85 pence per euro, 84 pence, 81 pence and 78 pence in one, three, six and 12 months, respectively"

Meaning you need 85 pence to buy an Euro now. But you'll only need 78 pence in 12 months.

"Sterling will trade at $1.59, $1.61, $1.64 and $1.67"

Same here: a pound buys only £1.59 now, but it will buy $1.67 in a year.

Or so they think.

.

Edited October 1, 2010 by Tired of Waiting

[geezer466]

I will be wintering in the Canaries so it better get a move on. 1.30ish will suite me fine for now.

[Realistbear]

It is the other way round RB. They think Sterling will go up in relation to both Euro and Dollar.

"The pound will trade at 85 pence per euro, 84 pence, 81 pence and 78 pence in one, three, six and 12 months, respectively"

Meaning you need 85 pence to buy an Euro now. But you'll only need 78 pence in 12 months.

"Sterling will trade at $1.59, $1.61, $1.64 and $1.67"

Same here: a pound buys only £1.59 now, but it will buy $1.67 in a year.

Or so they think.

.

Yup--I read it the other way round for the £/Euro call. Must be shell shocked by all the contrarian rubbish that has beenspewed out the last few months.

Can't see sterling going anywhere but down vs. the $ and Euro given today's PMI and the evidence that there is no recovery and the QE is wearing off necessitating another fix as Posen said earlier this week. We are in deper than the US and just about anyone else--even the Irish IMO. Its just that it hasn't all hatched out here yet as HPI is resilient--relatively speaking--and the banks are stable all the time the punters pay their mortgages.

[MongerOfDoom]

The Banksters at Barclays are advising us all to buy Euros which will go up vs. Sterling and the $. So much debt, so much sovereign debt crises and all contained so quickly and painlessly. Ireland, Spain, Portugal are all just blips and contained.

The UK and US are not exactly shining examples of fiscal probity. While I am certainly not willing to take an investment position based on the report, I very much doubt it is possible to rubbish it just on the basis of the observation above. The whole point of GIPSI not being able to print their currency is that they cannot devalue it to avoid defaulting.

[neil324]

Yup--I read it the other way round for the £/Euro call. Must be shell shocked by all the contrarian rubbish that has beenspewed out the last few months.

Can't see sterling going anywhere but down vs. the $ and Euro given today's PMI and the evidence that there is no recovery and the QE is wearing off necessitating another fix as Posen said earlier this week. We are in deper than the US and just about anyone else--even the Irish IMO. Its just that it hasn't all hatched out here yet as HPI is resilient--relatively speaking--and the banks are stable all the time the punters pay their mortgages.

I agree the Pound agaisnt the Euro this week has just reinforced this view. Wait untill the SHF proper. 1.35 to the Dollar and parity with the Euro no problem.

[Realistbear]

I agree the Pound agaisnt the Euro this week has just reinforced this view. Wait untill the SHF proper. 1.35 to the Dollar and parity with the Euro no problem.

That was around the forecast given earlier this year by PNP Paribas.

We are still headed into the shinola storm and the last man standing property-bubble-wise. With manufacturing tanking and exports drying up we have nowhere to go now but to try to weather a few years of cut backs, austerity and a massive HPC.

[Toto deVeer]

Chris Whalen (Institutional Risk Analytics) speaking at the Von Mises Institute was alleging that the European banks are in such bad shape that another Marshall Plan will be needed to save the Eurozone. I don't think he would agree with Barclays on the Euro and Sterling.

Of course he's a bit negative about Europe and the UK generally. If you've got a spare 30 minutes or so:

Edited October 1, 2010 by Toto deVeer

[Number79]

deleted

Edited October 1, 2010 by richyc

[mattyfc]

We were never going to maintain such a high level of manufacturing expansion. No one expects growth to continue at 1%+ Q on Q, a growth rate of even 0.5% a quarter would be pretty impressive considering.

The Euro PMI was even worse, Germany and France going along great but Spain & Ireland back in Manufacturing recession, along with Greece obv. German retail sales falling also. More divergence, makes the ECBs job even more difficult.

That being said I am not sure what Barclays are smoking, if sterling was going to strengthen as they have predicted the B of E would counteract it with all guns blazing. They want a weak currency and are very good at achieving it going by current performance.

[South Lorne]

That's sterling going UP against the Euro over 12 months, not down...

ED formatting

..that's more like it ...thought the headline was 'fishy'.....

[goldfever]

with a stronger sterling hurting our valuable export business and the rest of the world engaged in currency devaluations I'm sure the BoE won't allow a rising sterling for too long. queue QE2, lets print lots of brand new banknotes, that should sort the problem and it helps sort out the deficit through inflation. I wouldn't take a blind bit of notice of Barclays analysis no doubt they are busy shorting sterling preparing to take the money of all those on the long side. surely you don't trust the bankers do you? think JPM, think their call to short the euro at 1.18, think massive loss to shorts as it sailed up to 1.37. think outside the box.

[South Lorne]

with a stronger sterling hurting our valuable export business and the rest of the world engaged in currency devaluations I'm sure the BoE won't allow a rising sterling for too long. queue QE2, lets print lots of brand new banknotes, that should sort the problem and it helps sort out the deficit through inflation. I wouldn't take a blind bit of notice of Barclays analysis no doubt they are busy shorting sterling preparing to take the money of all those on the long side. surely you don't trust the bankers do you? think JPM, think their call to short the euro at 1.18, think massive loss to shorts as it sailed up to 1.37. think outside the box.

...everyone is in a race to devalue ....the Germans love the Euro ...no chance of having a weak currency with the DM....difficult to predict as everyone is striving to sell their exports ...sometimes the unthinkable floats to the top from 'inside the box'....

[Realistbear]

Sterling just broke below 1.15 to the Euro on FOREX. It is headed below 1.58 again vs. the $ for the umpteenth time and cannot seem to gain any traction above 1.585.

The markets may be reacting to the string of gloomy reports today--especially PMI data. Funny, as the tradres have been ignoring gthe bad news of late. IMO it will be the HPC that will send the traders into a frothy frenzy--but what will they buy when they dump Sterling?

[Realistbear]

1.14988

Barclays seem to have got it wrong if they are saying the Euro will fall vs. Sterling.

This is the first time below 1.15 in months IIRC.

[Number79]

1.14988

Barclays seem to have got it wrong if they are saying the Euro will fall vs. Sterling.

This is the first time below 1.15 in months IIRC.

8693, not been here since late may (23rd).

[goldfever]

personally I wouldn't trade dollar vs euro, gbp v euro, dollar vs gbp,or any combination thereof, not unless we have a massive currency intervention ala SNB euro buy or BoJ dollar buy and then only on the short side. all these currencies are falling due to deficit spending. stimulus and QE, they're all falling but at different speeds measured aginst the only true currency left...gold, the one the CBs can't print at will, the one thats rising day by day.(although golds not rising its just everything else thats falling) The CBs are bent on beggar thy neighbour currency devaluations, buy gold, buy energy, buy miners, buy commodities, buy rare earth. buy ag land and producers, thats my thinking anyway. Time to protect your wealth, the money in your savings account is getting decimated thru inflation. think weimar germany, think zimbabwe.thats the course we are on.