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Pluto

Sterling Is Going South Again

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It seems the markets are reacting to the BoE's lets sit on our hands and do nothing approach.

The B o E are in a difficult position. With a fragile economy a rise in rates would have wreaked havoc on house prices ( :) ) and with a drop the pound would already be below $1.70. Doing nothing sends the wrong signal also as it says they don't know what to do because they are damed if they do and damned if they don't.

We have had a good run for several years and now its time to pay for all the HPI and MEW.

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Sterling Is Going South Again

A year ago the we were at about 1.93 £=$ but we have been at 1.73 ish for 4 months – what made it drop for the first 6 months of the year because whatever it was –is not happening now

Also if my maths is right – if we bought a barrel of oil a year ago at $60 it would have cost us £31.08 although now it would cost us £34.77- a 10%ish increase over a year – I think the UK could stand another 15%ish taking us to 1.5 £=$

I just don’t understand why this is important especially when the pound has not gone south at all for 4 months?

Edited by look to the past

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The B o E are in a difficult position. With a fragile economy a rise in rates would have wreaked havoc on house prices ( :) ) and with a drop the pound would already be below $1.70. Doing nothing sends the wrong signal also as it says they don't know what to do because they are damed if they do and damned if they don't.

We have had a good run for several years and now its time to pay for all the HPI and MEW.

Doing nothing while all other central banks are hiking has the effect of weakening sterling - as we are seeing. Weaker Sterling = Inflation

Oh dear, they're in a pickle alright...

Edited by Pluto

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JUst above 1.72 against the US $. Quite a drop from 1.76 earlier this week. The markets may read the B o E's innaction as a sign of weakness. Also, the world is moving up up and away which will put more pressure on the UK as the weeks pass.

The B o E may be facing a choice: 1. HPC or, 2. Sterling Crash.

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Strong US farmroll figures. Makes Fed rate hikes more likely.

Right. Greenspan always said that higher wages would mean inflation. We can count on IR going up sharply this year. With the level of debt we have in the UK and stretched homeowners facing hyper inflation with council tax and fuel we may have some interesting property prices coming through soon. The "Spring Bounce" may already be behind us.

http://www.iii.co.uk/news/?type=afxnews&ar...&action=article

NEW YORK (AFX) -- The U.S. dollar strengthened against most of its major foreign-exchange counterparts after a better-than-expected February nonfarm payrolls report early Friday.
Meanwhile, the yen extended losses from the prior session, touching a two-week low against the dollar on bearish Japanese economic data and on continued fallout from the Bank of Japan's end of ultra-easing.
Observers said they see no reason for the Federal Reserve to halt its string of monetary-policy tightenings
.

http://uk.biz.yahoo.com/060310/94/g64gc.html

US economy generates 243,000 new jobs

Employment within the US economy rose by 243,000 in February, faster than analysts had expected, while
wages rose at their fastest rate since 2001
.
The number of net new jobs outside the farming sector, excluding from the figure due to its seasonal nature, was up from a reading of 170,000 in January, 20,000 lower than initially forecast.

http://www.msnbc.msn.com/id/11760591/

The figure, which came in above analyst estimate was likely to increase
fears of wage-induced inflation
in a market already rattled by worries over how high US interest rates will climb.

:):):)

Edited by Realistbear

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JUst above 1.72 against the US $. Quite a drop from 1.76 earlier this week. The markets may read the B o E's innaction as a sign of weakness. Also, the world is moving up up and away which will put more pressure on the UK as the weeks pass.

The B o E may be facing a choice: 1. HPC or, 2. Sterling Crash.

well, Mr Merv king did try and warn the public last year about house prices, if they don't listen and carry on buying / mewing / ramping the market then its there own fault, king will protect the pound not the greedy mew'ers and the economically numb heads.

bring on the rate rises

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well, Mr Merv king did try and warn the public last year about house prices, if they don't listen and carry on buying / mewing / ramping the market then its there own fault, king will protect the pound not the greedy mew'ers and the economically numb heads.

bring on the rate rises

Rate rises or sterling crash I dont care. Both have the same effect of making uk housing cheaper if you have had the sense to move your cash out of this dung hole of an economy.

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http://freeserve.advfn.com/news_Gold-futur...w_14550764.html

Gold futures touch a two-month low

SAN FRANCISCO (AFX) -- April gold touched $534.50 an ounce in morning
trading to touch its lowest level since Jan. 5. The contract was last down $10,
or 1.8%, at $537. Prices were poised to log a loss of around $30 for the week
after closing last Friday at $568. May silver also fell 13 cents to $9.84 an
ounce. It finished last week at $10.235. News that the U.S. economy created more
jobs than expected in February contributed to the decline in the metals prices.

Looks like the US $ is seeing the flight to safety? Sterling hitting lows today also.

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Ohh, that is nice, strong job figures in the US means greater possibility of increased Fed tightening, again sterling is a sitting duck in such an environment.

Nice link BB! Could this be the sterling crash that some predicted if Gordon did not keep IR inline with the rest of the world?

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Nice link BB! Could this be the sterling crash that some predicted if Gordon did not keep IR inline with the rest of the world?

It's quite interesting to see the BoE market intervention and consequent resistance.

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wow, big move down. Its just gapped to 1.724

Edited by RobertPaulson

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Short Striling dropping sharply too from Jun 06. The markets don't like this bullish data from the US.

The chance of a UK interest rate rise this summer has just increased. We can totally discount the chance of a drop now.

Any sign of CPI heading North and we know what that means don't we?

Edited by karhu

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This'll make that overseas property 'investment' a little more expensive.

Of course, those who have bought already have effectively hedged against falling sterling.

But, if the US market tanks, any dollar losses will translate to a lot more £ pain.

Funny things markets....

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I don't know if anyone has mentioned this, but we're seriously down on the EURO too. A whole 0.4%. Imported inflation here we come .....

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  • 301 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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