Falling Pound

[nodumsunreader]

Looks like the markets have factored in April's rate cut already with the pound falling at the end of last week against the $ and the euro. Will the cut be to 4.25% or 4%. I suspect that given rising unemployment , weak consumer confidence and a HPC a cut of 0.5% cannot be ruled out with rates at 3.5% by the year end.

[Sisyphus]

Looks like the markets have factored in April's rate cut already with the pound falling at the end of last week against the $ and the euro. Will the cut be to 4.25% or 4%. I suspect that given rising unemployment , weak consumer confidence and a HPC a cut of 0.5% cannot be ruled out with rates at 3.5% by the year end.

This is totally wrong and you are spamming this board with this rubbish.

All 31 of the economists polled by Bloomberg expect rates to be held in April.

The pound can drop as rates rise elsewhere too but I suspect you know this.

[Guest Winners and Losers]

Looks like the markets have factored in April's rate cut already with the pound falling at the end of last week against the $ and the euro. Will the cut be to 4.25% or 4%. I suspect that given rising unemployment , weak consumer confidence and a HPC a cut of 0.5% cannot be ruled out with rates at 3.5% by the year end.

Somebody make it all go away.

[Realistbear]

3.5% will do nicely. I hold US $ and that would translate to about 1.25 to the pound!

With world rates climbing rapidly this year and the B o J giving much needed momentum to that trend my guess is that UK rates will have to mirror the Fed. The US are anticipating 6% by the 4th Q.

Sterling collapse if the B o E go against the world trend:

The British pound lost

considerable ground

this morning against its U.S. counterpart, hitting a 10-week low after the U.S. payrolls number released. Even with strong economic data out of the UK, investors are starting to price in a rate cute as early as May. With the U.S. on pace to continue rate rises in 2006 look for

sterling to remain under pressure

.

http://www.fxstreet.com/nou/content/2025/c...ket&dia=1332006

Will Gordon preside over a devaluation of the pound? If he wants South American style inflation he will cut rates.

Edited March 13, 2006 by Realistbear

[sign_of_the_times]

another dumb quote from the master of dumb quotes (just see my signature)

Edited March 13, 2006 by sign_of_the_times

[Henrik]

Nodumsunreader: off topic, but you've got a reply in the "congrats FTB's" thread.

[Time to raise the rents.]

A full 1% drop would suit me just fine.

[E Powell]

nodumsunreader

Its time you found a proper paper to read. You

are just quoting from the Scum.

[Sisyphus]

A full 1% drop would suit me just fine.

how about a 1% rise - would that affect you?

[karhu]

Looks like the markets have factored in April's rate cut already with the pound falling at the end of last week against the $ and the euro. Will the cut be to 4.25% or 4%. I suspect that given rising unemployment , weak consumer confidence and a HPC a cut of 0.5% cannot be ruled out with rates at 3.5% by the year end.

Short stirling down sharply today. The market is now entertaining the possibility of two 25BP rises in UK IR.

Fundamentals would have to change hugely to have any possibility of a cut over the next 12 month.

The chance of a cut is now virtually 0.

The main worry now is JAPAN.

[algor]

Has the betting changed at all (on IR's I mean)?

Edited March 13, 2006 by algor

[Realistbear]

A full 1% drop would suit me just fine.

I hate to say it--but me too as a holder of US $. IMHO, IR will rise at the same time as sterling falls to below historic levels (c. 1.60) as Gordon will not preside over a sterling crash. The UK economy no longer justifies a high pound.

We are well into the correction phase of the economic cycle despite lagging indicators and apparent higher house prices (same thing happening in the US with falling volumes--it points to fewer higher priced homes selling with the bottom of the market falling away).

[Surrey cash buyer]

Short stirling down sharply today. The market is now entertaining the possibility of two 25BP rises in UK IR.

Fundamentals would have to change hugely to have any possibility of a cut over the next 12 month.

The chance of a cut is now virtually 0.

The main worry now is JAPAN.

Karhu, Do you have a link to up to the minute rate for Short Sterling? I've googled for it but can only find old figures. Thanks.

[jon]

Looks like the markets have factored in April's rate cut already with the pound falling at the end of last week against the $ and the euro. Will the cut be to 4.25% or 4%. I suspect that given rising unemployment , weak consumer confidence and a HPC a cut of 0.5% cannot be ruled out with rates at 3.5% by the year end.

Stephen Nickell leaves the MPC in May. Perhaps you should ask Gordon for a job application form ...

[Realistbear]

Karhu, Do you have a link to up to the minute rate for Short Sterling? I've googled for it but can only find old figures. Thanks.

This might work:

http://www.fxstreet.com/nou/graph/liverealtimequotes.asp

[karhu]

Karhu, Do you have a link to up to the minute rate for Short Sterling? I've googled for it but can only find old figures. Thanks.

All I can say is that we've had between 5 and 10BPs lopped off today alone significantly increasing the chances of IR increases.

The pound recouped some of it early Asian losses after a stronger than expected housing data survey suggested that the UK housing market is recovering. Sterling reached a low of 1.7229 at the Asian open on Monday on the back of continued selling from UK accounts concerned about the possibility of lower UK interest rates in the near future. However the unit managed to climb back to 1.7250 after the deputy Prime Minister’s report showed a stronger than expected jump in UK house price to 4.3% from 3.1% expected. The recovering UK housing market allayed fears from traders that BOE will forced to lower rates yet again in order to stimulate demand. In other news, UK PPI data came in line with PPI output prices rising to 0.3%. At 10:00 GMT GBP/USD was trading at 1.7257 slightly lower from its Friday New York close of 1.7265.

Weakness in £ is due to Asian trading. This is no indicator of potential IR reductions. The data is very much in the favour of IR hawks.

http://www.dailyfx.com/story/dailyfx-finan...keyword=article

Edited March 13, 2006 by karhu

[CrashBear]

Can't see that happening. Probably stay on hold or go up if anything.

[john_d_uk]

All I can say is that we've had between 5 and 10BPs lopped off today alone significantly increasing the chances of IR increases.

Weakness in £ is due to Asian trading. This is no indicator of potential IR reductions. The data is very much in the favour of IR hawks.

http://www.dailyfx.com/story/dailyfx-finan...keyword=article

When will the factor that the GBP is becoming a currency based almost entirely on internal borrowing be factored in?

Our trade deficit is £60 Billion for last year alone, we borrow £40 Billion per year at government level (ignoring the PFI - Enron type accounting currently being carried out) and personal debt is now over £1.1 Trillion GBP - I don't even know how many zeros that is... a lot of the debt is also tied up long term in housing, as MEWing reaches its endgame.

We import most consumables now, borrowing internally and sending what is left of our disposable money overseas. I believe that this simply cannot continue. Overseas markets and supply countries must be starting to wonder how this money will be repaid and how long we can keep spending, as we do not seem to be even recognising we are in a national financial crisis, let alone have a strategy to balance our payments.

Is it feasible that the GBP simply keeps falling?

What could the nation do to prevent this?

JD

Edited March 13, 2006 by john_d_uk

[Prude]

Uk Gilt yields continue to rise over the past month . Isn't this a sign that UK rates will follow?

I'm no expert on this but it seems that US rates lag the US bond market by a month or so.

[737]

Betting is place £100 to win £4 for no change

39/1 agauinst a rise and 21/1 against a fall (both of .25)

The sensible bet, if you think there's a move either way is to lay the 'no change' at 1.04 i.e. you 'stake' £250 - if you lose (no change) it's only costing you £10 and if you win (with either an intereest rate rise or fall) you pick up £260

[BoredTrainBuilder]

Is it feasible that the GBP simply keeps falling?

Pound is always claimed to be falling here on HPC but in reality rarely is. It's been in the same track against USD for 9 months and is actually rising against JPY, while it is higher than a year ago against EUR.

Claiming that it is is falling, tanking, taking a beating or whatever is not the same as it actually dropping.

I wish it was.

[newbie]

Pound is always claimed to be falling here on HPC but in reality rarely is. It's been in the same track against USD for 9 months and is actually rising against JPY, while it is higher than a year ago against EUR.

Claiming that it is is falling, tanking, taking a beating or whatever is not the same as it actually dropping.

I wish it was.

That's because sometimes it falls upwards!