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Realistbear

Currency Markets Eye U K Deficits And Trade Problems

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http://www.dailyfx.com/story/dailyfx_repor...keyword=article

If yesterday was rate announcement day in FX, today’s theme is trade. Overnight both UK and German Trade Balances reported results, with
UK figures showing surprising deterioration
. The UK Trade Balance with non EU members expanded to -3.3B versus expectations of -2.8 Billion pounds. Surprisingly, trade in crude registered the biggest surplus since last March, with the increase in the trade deficit coming strictly from an
ever widening gap between imports and exports
for consumer goods and services.
The news does not bode well for cable as the widening trade deficit will now weigh on UK growth going forward
. The
only
positive dynamic for pound longs remains UK capital markets which continue to attract massive amount of M&A flow and have been the dominant driver of pound demand over the past several months.

If the ONLY positive is the hope of further M & A activity we are on thin ice, especially if Ben calls a recession with further IR hikes at the Fed.

Not much underpinning the HPI bubble?

http://www.thisismoney.co.uk/news/article....62&in_page_id=2

Trade deficit blow to growth hopes

Evening Standard

9 June 2006

HOPES that foreign trade will boost the economy this year have suffered a setback from news that Britain's trade gap has widened again.
The trade-in-goods deficit rose from £5.7bn in March to £5.75bn in April. While exports to the resurgent European Union continued to improve, up 30% on a year ago, those to countries outside the EU, including the US, fell.
Adding to the disappointment, the Office for National Statistics said revisions indicated the
trade gap in the first quarter was a whopping £19.6bn, the highest on record
.
In its recent Inflation Report, the Bank of England predicted net trade would provide a 'modest boost' to UK growth over the next two years.
But with exports disappointing and imports still strong despite the weakness of consumer spending, analysts said the Bank could be disappointed.

The trade gap must continue to deteriotate as HPI means higher prices for our goods. We are now uncompetitive because we have to pay ridiculous prices for our homes. Well done Gordo! What a "Miracle" it all has been--that its lasted this long. The over valued pound will just keep the imports rolling in and restrict exports.

Edited by Realistbear

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I read loads of this sort of stuff. To be honest the news flows are often a bit erratic about our economy.

If one was to take a general average view, I think our economy is OK'ish, but obviously is going to be affected by the recent inflation fallout outlook of the whole planet. Therefore, we can espect some issues. However, the fact that the BOA hasn't had to quickly respond is a good sign, notice that we are all ready at 4.5 IR, whereas Euro is at just over half of this. You could therefore argue that the BOE has already put IRs in the right place for now.

Additionally, you really don't want a bu**ered economy and recession coz then some of is will lose our jobs and find it difficult buy houses and pay for our kids and that. What I mean is that we all want a HPC but if it actually happens you'll get other nuke fallout that won't be good either.

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I think our economy is OK'ish

You mean our 'economy' based on borrowing lots of money to buy tat and selling houses to each other at ever-increasing prices?

It's easy to have an 'OK' economy when you're throwing a hundred billion pounds of new credit into it every year. When that stops, you're screwed.

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You mean our 'economy' based on borrowing lots of money to buy tat and selling houses to each other at ever-increasing prices?

It's easy to have an 'OK' economy when you're throwing a hundred billion pounds of new credit into it every year. When that stops, you're screwed.

Agree this is the essense of Gordon's "Miracle." Billions of pounds borrowed on accomodative loans rates from Asia. Pumping up the HPI bubble and allowing us to buy tat beyond the wildest dreams of a generation ago. The UK becoming the world's largest market for Champagne, 2nd largest for Porsches etc. It cannot last and the unwinding of the yen carry trade is blowing the first chills accross Gordon's HPI-MEW generation.

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Am I right in thinking that in Currency terms + the UK being about a tenth of the size of the USA that our trade deficit is now worse then the USA :o Or is my maths just crap :P

+ of course we have a MUCH lower GDP growth rate :blink:

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Guest Alright Jack

I read loads of this sort of stuff. To be honest the news flows are often a bit erratic about our economy.

If one was to take a general average view, I think our economy is OK'ish, but obviously is going to be affected by the recent inflation fallout outlook of the whole planet. Therefore, we can espect some issues. However, the fact that the BOA hasn't had to quickly respond is a good sign, notice that we are all ready at 4.5 IR, whereas Euro is at just over half of this. You could therefore argue that the BOE has already put IRs in the right place for now.

Additionally, you really don't want a bu**ered economy and recession coz then some of is will lose our jobs and find it difficult buy houses and pay for our kids and that. What I mean is that we all want a HPC but if it actually happens you'll get other nuke fallout that won't be good either.

You're a real dumbass.

We've been running spiralling deficits for twenty years or more. We have an unpayable debt private debt mountain ready to blow up once hyperinflating fails to do the business. Most people agree that the $ is fcuked.

Compare the trade deficit postings today:-

UK £5.75 bn

USA $63.5 bn

Per capita these are not miles apart (quick calculation based on:-there are roughly five americans to 1 of us, there are roughly 2 dollars to each pound)

You still reckon the UK is 'okayish'? GET REAL!

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The consequences of a weak US dollar are worse for other nations:

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

SAINT PETERSBURG (AFX) - Japanese finance minister Sadakazu Tanigaki said he discussed the need for stable exchange rates with US treasury secretary John Snow.
"We did talk about exchange rates," Tanigaki told reporters after meeting with Snow ahead of the G8 finance ministers meeting here.
"Our exchange rates should move in a stable manner," he said.
Exchange rates are not on the meeting agenda as central bankers will not be present.
But Japan and European countries have been concerned at the economic impact of the dollar's recent sharp falls.
Euro group chairman Jean-Claude Juncker said earlier this week that he is "increasingly" worried about the exchange rate.
"I don't think we are in dangerous waters but it could get to dangerous waters," Juncker said at a meeting of euro zone finance ministers on Tuesday.

If the dollar is rangebound due to the damage it can do to other nations how do the imbalances unwind? Recession, sterling crash...?

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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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