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Yankee

Why It The Pound Falling Today?

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I've been busy today, but just noticed that the pound has dropped to $1.85.

What economic news has triggered this dip? I can't seem to find anything specific.

Blair's support of Bush?

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Because changes like this in the currency markets are almost always a reaction to specific news.

http://quote.bloomberg.com/apps/news?pid=1...efer=news_index

Dollar Rises as Inflation Gauge Keeps Rate-Increase Bets Intact

May 26 (Bloomberg) -- The dollar rose against the euro and the yen after a government inflation report kept intact expectations the Federal Reserve will lift interest rates for a 17th straight time next month.

...

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Because changes like this in the currency markets are almost always a reaction to specific news. [HousePriceLottery]

Most times it's commentators pinning the news onto the market movement after the fact.

May 26 (Bloomberg) -- The dollar rose against the euro and the yen after a government inflation report kept intact expectations the Federal Reserve will lift interest rates for a 17th straight time next month.

Perhaps a true chronological statement, but hardly evidence of cause and effect.

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Why does it have to have a 'trigger'? Sentiment's changed, that's all.

Great point. You could go mad looking for reasons why stocks etc go up and down. As far as I care, the uptrend was broken a while ago (and also EUR vs USD) therefore a sell off was going to happen at some point.

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Most times it's commentators pinning the news onto the market movement after the fact.

Not on the forex market, you can see reactions instantly linked to data releases. It's not the sort of fuzzy logic you see on the equity markets.

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Not on the forex market, you can see reactions instantly linked to data releases. It's not the sort of fuzzy logic you see on the equity markets.

UK GDP was recently released which was 0.6%, but also the BOP showed a steepening trend, as the deficit on the current account seemed to extend. Consumers are buying more imports vs exports, but also 'transfers abroad' are now a major catagory in the current account deficit.

Edited by brainclamp

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Entirely the opposite.

I suspect you knew that, but it wouldn't suprise me if you didn't know it either.

You've obviously been watching the well spun saccharine shit on CNBC again, it would rot your mind, if you had one.

Look at the figures, inflation was above target, just not as much as the markets had feared given the previous PPI data. So it's a matter of degree, if you were shot in the leg it's not good news, but it's good news compared to being shot in the head... not that it would make any difference in your case.

http://abcnews.go.com/Business/wireStory?id=2008687' rel="external nofollow">
Rising energy prices were taking their toll on consumer confidence, which dropped to 79.1 in May, the lowest reading in seven months, according to the University of Michigan's survey of consumer sentiment.
Core inflation, excluding energy and food, was up 2.1 percent in April compared to the same month a year ago. This was the fastest increase in this inflation gauge since a similar 2.1 percent increase for the 12 months ending in March 2005 and was above the Fed's comfort zone for inflation.

There was a 0.5% gain in personal incomes but this is instantly offset by a 0.5% hike in consumer prices, nice, but enough to scare the Fed?

Edited by BuyingBear

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it was primarily due to position squaring by hedge funds prior to the long weekend although weaker borrowing didn't help the £ - U.S. inflation data was benign

just like anything else, currencies don't go up and down in straight lines - 1.73 to 1.90 in a month is a pretty big move and a pullback was expected - the dollar's demise will likely continue later in the year although there may well be squaring down to 1.80 if we break below 1.85

the best opportunity may well be the yen - remember, only 2 years ago it was trading at 102 against the current 112.5

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It seems the official inflation indicators are still being regarded. Anyway;

You never quite know what drives markets, even at the best of times, however, at this time it is likely to be a result of 'thin' volume due to the extended Memorial Day holiday weekend. During periods of thin volume, markets are apt to react 'out of sync' with the norm, due to pit broker manipulation ...amongst other things. Sometimes the pit takes advantage of insider info on the qt by exercising a sufficient amount of orders to trigger stops...other times they use these opportunities to blow-out the weak players(like last Wednesday SP500 longs on the close) using a similar strategy. More often than not it's usually an organised 'local' profit squeeze. Due to low volume, a concerted effort can be mounted 'locally' to 'force' prices in a desired direction for a short time period. That is, the big institutional players who normally direct market action are not around to take advantage of artificial price swings, which in turn encourages the Pit Brokers to take the p*ss.

---

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good explanation - some of the price action this week has been quite dramatic - dollar strengthened for no apparent reason late weds (or was it tues?)

Dollar repatriation from emerging markets? US funds were certainly dropping miners quoted in London.

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  • 302 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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