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Sterling Taking Off On "good News" --merged thread

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1 GBP $ = 1.61962 Euro = 1.17227

Sound fundamentals or the propsect of market kiling hikes in IR?

Pfizer closurer seemed to trigger a spike yesterday--bad news is a buy signal in a contrarian market. :lol:

Fundamentals:

1. Jobs being lost (only 3% of new jobs are FT)

2. Mortgage lending at worst level in recorded history, house market YoY negative

3. Debt surpassed 1TR mark recently

4. Trade deficit at record levels

5. IR hike threaten recovery

6. GDP falling

Technicals:

1. Jupiter is in the second phase of Mars

2. Third wave -- Elliott Wave scenario

3. Oscillator wobbling

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1 GBP $ = 1.61962 Euro = 1.17227

Sound fundamentals or the propsect of market kiling hikes in IR?

Pfizer closurer seemed to trigger a spike yesterday--bad news is a buy signal in a contrarian market. :lol:

Fundamentals:

1. Jobs being lost (only 3% of new jobs are FT)

2. Mortgage lending at worst level in recorded history, house market YoY negative

3. Debt surpassed 1TR mark recently

4. Trade deficit at record levels

5. IR hike threaten recovery

6. GDP falling

Technicals:

1. Jupiter is in the second phase of Mars

2. Third wave -- Elliott Wave scenario

3. Oscillator wobbling

If you look a little closer you will see that it is the US$ falling rather than sterling "taking off".

Against the Euro, Yen, Aus$, NZ$, S$ it is static.

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If you look a little closer you will see that it is the US$ falling rather than sterling "taking off".

Against the Euro, Yen, Aus$, NZ$, S$ it is static.

Sterling up 1c vs, the Euo after testing 1.15 a few days ago.

A quick glance at some pairs shows Sterling is rising against all of them--and rapidly too:

Currency Pair Price Change

GBP to USD 1.6201 +0.0067

GBP to EUR 1.1724 +0.0010

GBP to JPY 131.9530 +0.6465

GBP to TRY 2.5553 +0.0074

GBP to THB 49.9805 +0.1376

Pound only up slightly vs. CHF though (+0.2):

EUR/CHF(CCY: EURCHF=X )

Last Trade: 1.2931

At this moment it is leading the world's majors--even if only by small amounts.

I would say it s a buying frenzy based on negative fundamentals which could point to a major sell off if we get some good news soon?

Edited by Realistbear

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What about sterling as measured against a basket of different currencies?

The post above shows a good crossection and it is up against all of them.

Underlying confidence in UK Plc is very strong despite the facts.

Edited by Realistbear

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This just handed to me:

http://uk.finance.yahoo.com/news/Forex-focus-watch-currency-tele-1491929377.html?x=0

Forex focus: watch out for currency market jitters

10:03, Wednesday 2 February 2011

The currency market has a bad case of the jitters, writes Liz Phillips.

Hang on tight. There’s a bumpy ride ahead.

Of course currencies always ebb and flow, but in today’s unstable global economic climate they are more prone to knee-jerk reactions.

Just like the stock market, what currency markets dislike most is uncertainty. And in the short-to-medium term at least, economic and political uncertainty look set to be the norm. This could make the markets even more volatile.

The unfolding unrest in the Middle East has firmly focused investors’ minds on risk aversion, but where, these days, is a safe haven? The rule book has been torn up.

Exchange rates are buffeted about by every piece of bad news - or even rumour.

“The markets are jittery because the economic recovery is still shrouded in a huge amount of uncertainty,” said Jeremy Cook, chief economist at foreign exchange brokers World First (Berlin: FC0.BE - news) .

The latest UK GDP figures were poor, the European debt crisis is still unresolved and is likely to remain so four to five years, and the Fed’s second round of quantitative easing last year has not yet acted as the ‘silver bullet’ that some commentators lauded it to be.”

Christina Weisz, director of Currency Solutions , agrees that markets are nervous of “the still significant challenges” facing the big Western economies.

"Ongoing concerns about economic stagnation in the States despite an improved Q4, the threat of stagflation and rising unemployment in the UK and the prospect of further sovereign debt crises in the eurozone will continue to weigh down on sterling, the euro and US dollar alike.

"Extremely high oil prices, stubbornly high unemployment and low consumer confidence mean none of the major Western economies are emerging from the recession with much brio - Britain above all.

“The tentative nature of the 'recovery' is causing currencies to be extremely volatile, which makes hedging strategies more important than ever.”

Charles Purdy, director of Smart (SMAR.JK - news) Currency Exchange feels we are some way from calm and stability: “In the absence of any cataclysmic event such as a major bank having to be rescued then last year can, I think, be taken as the norm.

“Until the problems with economic growth, high government and bank debt and high government expenditure are sorted out; exchange rates can be blown in any direction as the information flow dictates. Movement will tend to be rapid and significant.”

“The only thing that will calm the markets is the belief that these problems are behind us and this will take at least two to three years. Once these problems are sorted out, then the Western world will bounce back. “

Not everyone agrees, however, that stability can be regained so soon. In fact underpinning a lot of the uncertainty is the possibility we could be entering a new world order.

The eurozone, UK and US economic recoveries are, at best, sluggish while Asia powers ahead. The World Bank has estimated that emerging countries will be contributing almost a half of global growth this year.

According to Christine Weisz: “Yesterday's high risk currency could become tomorrow's safe haven - and vice versa.

"We could see emerging market and commodity-based currencies continue to gain strength. If the BRIC (news) [brazil, Russia (OMXR.EX - news) , India and China] economies can break away from the US dollar there is a strong likelihood they will play a significant role in shaping global markets in the next few years. The brave new world that is forming, driven by the BRIC economies, will further destabilize already volatile currency markets.”

Michael Derks, chief strategist at FxPro spells out the extent of change to date: “From the end of 2002 to 2010, the Brazilian Real recorded a 113 per cent increase against the dollar and 116 per cent against the pound, the Aussie was up 82 per cent against, the USD up 85 per cent against sterling and the Thai Baht rose by 47 per cent against the greenback and 50 per cent against the pound.”

Of course rapid growth has led to inflationary problems for emerging economies in the recent past. A good deal of the money printed for quantitative easing has gone into speculation in these markets and in commodities, increasing pressures. However, lessons were learnt from the Nineties’ crashes and the emerging economies are more ready to use controls such as curbs on credit to prevent their economies running out of control.

Many analysts forecast an increasing shift of power to the East.

“This year and beyond will see the economies of the west struggle under a burden of debt that will remain for many generations to come. The need for China and the remaining emerging market nations to drive forward global growth will see a structural shift in power to the east and the currencies involved in this will continue to rise,” said Mark O'Sullivan, group head of dealing and products at Currencies Direct .

“The jury is still out on whether quantitative easing is the way forward. Also, the solution to restructuring the mountain of European debt has yet to be found. It’s still a real possibility that the UK could slip back into recession.

“The US economy will still struggle to move forward with unemployment stuck around 9 per cent and with a huge debt burden that now needs to be serviced.

“The key drivers will continue to be the economies of Asia led by China.”

Jeremy Cook goes further: “It is a real possibility that a weak Western hemisphere could be the new norm. Conceivably, the current climate could remain for the next 10 to 15 years. Chinese growth is not going to slow down anytime soon. “

Chris Towner, chief economist of currency specialists HiFX adds; “There is certainly a shift in power from West to East. The commodity economies will be helped by stronger demand as the Asian economies strengthen; however there is a vulnerability to them if there is any sign of slowing in Asia.

“The shift from West to East is the new norm and for the Western countries to remain buoyant they need to continue to change and accommodate demand from Asia.”

Realistbear, housepricecrasher extraordinaire believes it is all "a load of old ******."

The message from the world economic forum at Davos this week has been one of cautious optimism but some fear it’s just the calm between storms.

In the short term at least the US dollar, pound and euro seem likely to remain sensitive to the release of GDP and business sentiment figures and the possibility of interest rate rises. Western governments will continue to prefer their currencies remain weak to help their manufacturing industries and will continue to fight inflationary pressures and calls for interest rate rises.

The euro still faces an uncertain future with the IMF (Berlin: MXG1.BE - news) calling on the eurozone last week to strengthen its bail-out fund and more urgent meetings this week on Greek debt.

Edited by Realistbear

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A quick google brings up:

GBP-index-daily.gif_640W.gif

The base 100 value is set from January 2005. Weights were last determined in September 2008.
The basket currently comprises 46 countries, with the main components as follows; USA at 16.1%; Germany at 12.5%; France at 9.4%; The Netherlands at 6.6%; China 5.9%; Belgium and Luxembourg at 5.9%; Italy at 4.7%; Japan at 4.3% and Switzerland at 2.9%.

From AshrafLaidi.com

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What about sterling as measured against a basket of different currencies?

Or perhaps even a cocktail of Basket Case Currencies?

:lol:

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A quick google brings up:

GBP-index-daily.gif_640W.gif

The base 100 value is set from January 2005. Weights were last determined in September 2008.
The basket currently comprises 46 countries, with the main components as follows; USA at 16.1%; Germany at 12.5%; France at 9.4%; The Netherlands at 6.6%; China 5.9%; Belgium and Luxembourg at 5.9%; Italy at 4.7%; Japan at 4.3% and Switzerland at 2.9%.

From AshrafLaidi.com

Seems to show a generally downward bias. Last few days may have been a reversal of this trend agist a broad base of currencies following a spate of what would nromally be bad news for £ (GDP growth slowing, job losses, debt issues, mortgage ledning crash etc.).

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Sterling up 1c vs, the Euo after testing 1.15 a few days ago.

A quick glance at some pairs shows Sterling is rising against all of them--and rapidly too:

Currency Pair Price Change

GBP to USD 1.6201 +0.0067

GBP to EUR 1.1724 +0.0010

GBP to JPY 131.9530 +0.6465

GBP to TRY 2.5553 +0.0074

GBP to THB 49.9805 +0.1376

Pound only up slightly vs. CHF though (+0.2):

EUR/CHF(CCY: EURCHF=X )

Last Trade: 1.2931

At this moment it is leading the world's majors--even if only by small amounts.

I would say it s a buying frenzy based on negative fundamentals which could point to a major sell off if we get some good news soon?

A 0.5% change is just noise and hardly rapid.

Edited by Buccaneer

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A 0.5% change is just noise and hardly rapid.

Usually true but here we are seeing a very broad based rise in Sterling--up against all of the majors including CHF and YEN. The last time £ was up against all of the majors was shortly after Kennedy was shot. IIRC. ;)

The fundamentals are bad and I doubnt there is any technical analysis out there that says £ is a buy either.

Rumours on IR hikes I suppose which will be a good £ boost ST and a major sell signal MT and LT. Classic buy the rumour and sell BEFORE the news breaks?

Edited by Realistbear

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What about sterling as measured against a basket of different currencies?

fixed

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Currency Pair Price Change

GBP to USD 1.621 +0.0076

GBP to EUR 1.1724 +0.001

GBP to JPY 132.2023 +0.8958

GBP to TRY 2.5585 +0.0107

GBP to THB 50.0166

Up accross the board. Especially vs Japan, US. Japan just announced a significant return to deflation which explains that one.

IMO--its IR driven--no other explanation out there as everything else looks grim for sterling.

I am planning a couple of weeks in the EZ in March so it might be time to get the holly-pocky.*

* Holiday pocketmoney--candidate for most annoying saying. :angry:

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1 GBP $ = 1.61962 Euro = 1.17227

Do you feel panicked as though you are thrashing about in quicksand with those Yankee dollars instead of having our glorious pounds sterling?

Last year Nadeem Walyat (Market Oracle) predicted sterling at $1.80 to $1.90 by mid 2011.

Yesterday he was saying this

I don't see any reason to focus on gold and silver right now as I expect the dollar to fall against sterling into Mid 2011, by about another 17%.

So even if gold rises by 15% in dollars (not a forecast) its still no profit in sterling.

I don't flip flop on the news (meaning GDP -0.5%), but instead took the dollar rally as a good opportunity to buy more sterling (on leverage).

I did a quick analysis on the GDP, that confirmed my expectations for £/$1.85. Of course there is always a risk of being wrong, in which case my stops will be hit (currently £/$1/52).

Edit for link http://www.marketoracle.co.uk/Article25961.html

Edited by Redhat Sly

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Do you feel panicked as though you are thrashing about in quicksand with those Yankee dollars instead of having our glorious pounds sterling?

Last year Nadeem Walyat (Market Oracle) predicted sterling at $1.80 to $1.90 by mid 2011.

Yesterday he was saying this

I have near enough given up LT on this country and am looking at properties in Southen California for a move in 5-7 years time. Opinions about £ are deeply divided with estimates as low as 1.35 and as high as 1.85.

It all depends on how our major industry does: HPI.

UBS were wide of the mark last year:

UBS forecasts that the Pound will reach $1.35 by the end of 2010, as central banks in the UK and the U.S are forced to resume bond purchases.

Slightly bearish forecast for £:

Financial Forecast Center
US Dollar to UK Pound Currency Exchange Forecast
U.S. Dollars per one British Pound. Average of Month.
Month Date Forecast
Value 50%
Correct +/- 80%
Correct +/-
0 Dec 2010 1.5595 0.000 0.000
1 Jan 2011 1.549 0.019 0.043
2 Feb 2011 1.523 0.024 0.053
3 Mar 2011 1.474 0.027 0.061
4 Apr 2011 1.425 0.030 0.067
5 May 2011 1.371 0.032 0.072
6 Jun 2011 1.316 0.034 0.077
7 Jul 2011 1.280 0.036 0.081
8 Aug 2011 1.267 0.038 0.085

Currencies have the jitters--the only thing we can tell.

Our slowing economy will not be a factor in Sterling strengh it seems:

http://www.forexrate.co.uk/

Sterling dipped dramatically overnight against both the Euro and the US Dollar. GBP/EUR is trading at a yearly low of 1.1532 and GBP/USD is up slightly off the low at 1.58. This move follows yesterday’s largely unexpected decline in Gross Domestic Product in the UK. The headline figure released by the office for national statistics showed that the economy contracted 0.5% in the final quarter of 2009, markets had been anticipating growth of 0.4.

Effects lasted less than 48 hours.

IMO we will not see any selling in Sterling unless we have a major HPC as we can survive without GDP growth and job losses.

But a major HPC will drop Sterling like a stone in a bucket of 7-up.

Still up accross the board:

GBP to USD 1.6204 +0.0069

GBP to EUR 1.1724 +0.001

GBP to JPY 132.0102 +0.7037

GBP to TRY 2.5569 +0.009

GBP to THB 49.9899 +0.147

Edited by Realistbear

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I wouldnt be surprised if this week marks the sterling high for the year against the dollar. There is a nice trendline from the highs of the 5th of August 2009 and 16th November 2009 that we are just about to hit at 1.625, then there is the high of the 4th of November last year that we are just below. Then there is the fact that the bad news for Britain and relatively good news for the USD has seemingly had no effect on this recent uptrend, plus the appearance of threads like this on HPC, indicating that market sentiment is at an extreme positive. All of these are indicators of a market top. I am short GBPUSD from here looking for 1.55 in the next month or two.

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1 GBP $ = 1.61962 Euro = 1.17227

Sound fundamentals or the propsect of market kiling hikes in IR?

Pfizer closurer seemed to trigger a spike yesterday--bad news is a buy signal in a contrarian market. :lol:

Fundamentals:

1. Jobs being lost (only 3% of new jobs are FT)

2. Mortgage lending at worst level in recorded history, house market YoY negative

3. Debt surpassed 1TR mark recently

4. Trade deficit at record levels

5. IR hike threaten recovery

6. GDP falling

Technicals:

1. Jupiter is in the second phase of Mars

2. Third wave -- Elliott Wave scenario

3. Oscillator wobbling

The realistbear world must be a constant stream of highs and lows.

Meanwhile, back in the real world:

http://www.bbc.co.uk/news/business-12343459

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GOLD 02/02/2011 08:06 1335.60 -6.30

Hope you sold in time? ;)

Please don't try and make every thread into a gold trolling session, RB. If you want to discuss that, there's a place to go.

Now, how about the completely logical reason for todays jump in sterling? Or does that not fit in with your odd world view?

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Please don't try and make every thread into a gold trolling session, RB. If you want to discuss that, there's a place to go.

Now, how about the completely logical reason for todays jump in sterling? Or does that not fit in with your odd world view?

Sterling's rise against most of the majors is FX traders pushing it--momentum trading and sense of containment in the EZ. It can't be based on the fundementals because they are all bad--even the blip in construction is an obvious one off as not many builders were bricking it last December. It isn't the technicals either as the Elliott Wave boys are predicting a sharp drop and most technical analysts are going on about repeated tops without a break out (like gold),

Sterling is still up against all of them:

GBP to USD 1.6202 +0.0067

GBP to EUR 1.1724 +0.001

GBP to JPY 131.8397 +0.5332

GBP to TRY 2.5606 +0.0128

GBP to THB 49.9897 +0.1468

Bottom line:

http://uk.finance.yahoo.com/news/Economic-recovery-lifts-world-reuters_molt-295516941.html?x=0

The dollar hit a 12-week low but then rebounded. Expectations of loose U.S. monetary policy are encouraging risk-taking and concerns over
euro zone peripheral debt seemed to be contained
.../
Gold fell as rising equities, hopes for continued global recovery and easing concern about Egypt dampened its safe haven appeal. Spot gold fell more than $7 to around $1,333 an ounce, well below its December record high of around $1,430.
Edited by Realistbear

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1 GBP $ = 1.61962 Euro = 1.17227

Technicals:

1. Jupiter is in the second phase of Mars

2. Third wave -- Elliott Wave scenario

3. Oscillator wobbling

You forgot the Bollinger Bands and classic head and shoulders pattern coupled with a teacup and handle formation.

But your number 1 above is the most important I feel, closely followed by number 3.

Edited by SHERWICK

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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% +
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      • up 5%



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