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Realistbear

At Last! Currency Markets Starting To Look At Sterling

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http://today.reuters.co.uk/investing/finan...ERLING-OPEN.XML

Sterling eyes 2-month lows after housing data

Thu Jun 29, 2006 8:52 AM BST

LONDON, June 29 (Reuters) - Sterling dipped towards recent two-month lows against the euro and dollar on Thursday and hit two-month lows on its trade-weighted index, following soft UK house price data and ahead of an anticipated U.S. rate rise.
Sterling has been under pressure in recent days on expectations that U.S. and euro zone rates will rise, and a growing belief that UK rates will remain unchanged.
Nationwide Building Society housing data released earlier on Thursday showed prices rose 0.3 percent in June, which analysts said was only a modest increase.

If the currency markets have woken up to the Miracle Economy the pound will continue to weaken and Gordon will be dragged kicking and screaming to the point of having to raise rates or increase inflation which a low pound will bring. He will just have to comply with the worldwide trend and not be a rebel!

The news thus far today has been congenial for Bears. :)

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Guest Alright Jack

http://today.reuters.co.uk/investing/finan...ERLING-OPEN.XML

Sterling eyes 2-month lows after housing data

Thu Jun 29, 2006 8:52 AM BST

LONDON, June 29 (Reuters) - Sterling dipped towards recent two-month lows against the euro and dollar on Thursday and hit two-month lows on its trade-weighted index, following soft UK house price data and ahead of an anticipated U.S. rate rise.
Sterling has been under pressure in recent days on expectations that U.S. and euro zone rates will rise, and a growing belief that UK rates will remain unchanged.
Nationwide Building Society housing data released earlier on Thursday showed prices rose 0.3 percent in June, which analysts said was only a modest increase.

If the currency markets have woken up to the Miracle Economy the pound will continue to weaken and Gordon will be dragged kicking and screaming to the point of having to raise rates or increase inflation which a low pound will bring. He will just have to comply with the worldwide trend and not be a rebel!

The news thus far today has been congenial for Bears. :)

It's the inflation that brings about the 'lowering' of the pound.

How do you manage to get this stuff all backwards?????

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It's the inflation that brings about the 'lowering' of the pound.

How do you manage to get this stuff all backwards?????

LONDON, June 29 (Reuters) - Sterling dipped towards recent two-month lows against the euro and dollar on Thursday and hit two-month lows on its trade-weighted index, following soft UK house price data and ahead of an anticipated U.S. rate rise
.

You might be right. But the article states that sterling is coming under pressure not because of inflation but due to soft housing data and the implicit refusal to raise IR while the US and ECB raise theirs.

"We are looking for higher rates in the U.S. and the euro zone, and that is weakening the pound."

Inflation will increase if Gordon does nothing as the pound will continue to decrease in value making imports more expensive. This will , inturn, exacerbate our inflation rate.

Thus "inflation" does not lower the pound but should cause Gordon to raise the rates.

Edited by Realistbear

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It's the inflation that brings about the 'lowering' of the pound.

How do you manage to get this stuff all backwards?????

Not entirley sure there is such a one-way causal relationship between IR and currency value - I think you will find that there are no hard and fast rules and that it works either way.

HAL

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Guest Alright Jack

I think you will find that you are all talking cr@p!

When you inflate the supply of moneycredit you devalue the currency. This shows up in rising asset and consumer prices and on the exchange standards.

It is very simple. Governments and central banks like to confuse the issue with nonsense.

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I think you will find that you are all talking cr@p!

When you inflate the supply of moneycredit you devalue the currency. This shows up in rising asset and consumer prices and on the exchange standards.

It is very simple. Governments and central banks like to confuse the issue with nonsense.

Could be but the markets seem to be sending a signal that if Gordon continues in the same non-IR hiking mode sterling is going to continue in the same direction-down.

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Whats interesting about this site is people make financial predictions way before they happen. Months or years before gold went through the roof Bubb and a few others had been banging on about buying gold and initially it looked as though they had got it wrong, then bang.

As with falling value of the £ and the eventual need to rise IR's no matter what theory, this has been discussed for an awfully long time but as yet nothing has happened, until now that is, OK this could be a false dawn but either way i'm sure they will be proved right in the end.

Well done.

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Whats interesting about this site is people make financial predictions way before they happen. Months or years before gold went through the roof Bubb and a few others had been banging on about buying gold and initially it looked as though they had got it wrong, then bang.

As with falling value of the £ and the eventual need to rise IR's no matter what theory, this has been discussed for an awfully long time but as yet nothing has happened, until now that is, OK this could be a false dawn but either way i'm sure they will be proved right in the end.

Well done.

Yes, There have also been some very well informed stock pics from the AIM touted on this forum over the past 24 months: BFC, RTD, DOO.

Also, calling the top of the FTSE on here was about right too.

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1 U.K. £ =

1 1.8117

http://today.reuters.co.uk/investing/finan...BANK-URGENT.XML

BoE's King signals no rush to move interest rates

Thu Jun 29, 2006 10:37 AM BST

LONDON, June 29 (Reuters) - The Bank of England is in no hurry to move interest rates as a number of uncertainties cloud the economic outlook, Governor Mervyn King signalled on Thursday.

What happened to Mervyn since his last comment:

Mervyn King, the Governor of the Bank of England, said yesterday: "Relative to average earnings or incomes, or anything else you could look at, house prices do seem remarkably high."
(Telegraph.co.uk Thursday, 11th May 2006)

David Walton? :ph34r:

Edited by Realistbear

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LONDON, June 29 (Reuters) - The Bank of England is in no hurry to move interest rates a
s a number of uncertainties cloud the economic outlook
, Governor Mervyn King signalled on Thursday.

What he really means is, if they move interest rates up, Mr Brown will not be happy!

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I don't know how many people on this site actually have any formal economics background or work in finance but there are a lot of very compelling arguments, which is more than you can say for a lot of what the professionals come out with.

I hadn't had much interest in things financial until I started earning what I thought were fantastic amounts of money and then realised I could still only afford to by a hovel. Anyway, it does not take a genius to predict the UK is not in quite as rude health as some would have us beleive.

I've been wondering for a long time how sterling has stayed so strong. From where I'm sitting there don't seem to be many fundamentals to support this position. One argument I've heard is sterling is still considered to be a safe haven for investors from emerging markets?

It seems strange that every other central bank seems to be more worried about infaltion than the BOE. Considering we are gross importers then surely our basket of goods has to be affected by the same inflation as other countries. I guess one explanation is we are importing cheap labour faster than most.

Anyway, at this moment in time it seems to me that the storm clouds are gathering more convincingly than at anytime to date.

The housing market ground to a halt last year and IRs were lowered. Thant's not going to happen this time round.

The longer the MPC delay the inevitable the worst it is going to be

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"LONDON, June 29 (Reuters) - The Bank of England is in no hurry to move interest rates as a number of uncertainties cloud the economic outlook, Governor Mervyn King signalled on Thursday."

He didn't actually say that, typical media.

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It seems strange that every other central bank seems to be more worried about infaltion than the BOE. Considering we are gross importers then surely our basket of goods has to be affected by the same inflation as other countries. I guess one explanation is we are importing cheap labour faster than most.

Only if other countries rig the "basket of goods" like we do, by removing anything going up in price!

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I've been wondering for a long time how sterling has stayed so strong. From where I'm sitting there don't seem to be many fundamentals to support this position.

Well as the Buddha would say - 'it's all relative'. Sterling is one currency among many, and many of those other currencies also have plenty of downside risk to them- notably the dollar, but the euro also has a few potential serious faultlines.

One of the other problems is that a great deal of East Asian currencies are pegged relative to other currencies - especially the dollar - restraining their appreciation or depreciation. That means when the fed looks to massage the dollar down (or it goes down of its own accord) it tends to mean that free floating currencies such as Sterling and the Euro go up relative to it.

Of course more bad news for UK plc and growing gaps in interest rate differentials will change this, but to the market at present it is not such an obvious outcome.

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Whats interesting about this site is people make financial predictions way before they happen. Months or years before gold went through the roof Bubb and a few others had been banging on about buying gold and initially it looked as though they had got it wrong, then bang.

A word of caution : RB ain't no Bubb.

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Some here think I am bear turned bull, but I am not really. However, I do try not to allow my desires to influence my interpretation of events.

Let's be honest here. The pound was at 1.72 not very long ago - and went up while US rates were being increased - strange behaviour. Surely the pound could go back to 1.72 quite quickly with little or no effect on inflation.

And then, if the BOE/GB decide to play hard ball, they could let the pound go down to 1.60 and still pretend inflation was not an issue. Couldn't they?

I think it will take currency speculation to have any real effect - i.e. to force sterling rates up at some stage. I wish it were not so.

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Some here think I am bear turned bull, but I am not really. However, I do try not to allow my desires to influence my interpretation of events.

Let's be honest here. The pound was at 1.72 not very long ago - and went up while US rates were being increased - strange behaviour. Surely the pound could go back to 1.72 quite quickly with little or no effect on inflation.

And then, if the BOE/GB decide to play hard ball, they could let the pound go down to 1.60 and still pretend inflation was not an issue. Couldn't they?

I think it will take currency speculation to have any real effect - i.e. to force sterling rates up at some stage. I wish it were not so.

I'm not so sure....maybe the growth of Sterling from $1.70 to $1.88 has been helping to keep inflation figures down....now we're still at 2%-ish inflation, wouldn't a loss of 10% of Sterlings buying power in $'s lead to imported inflation? Admittedly not a massive effect, but an effect non the less....

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When you inflate the supply of moneycredit you devalue the currency. This shows up in rising asset and consumer prices and on the exchange standards.

It is very simple. Governments and central banks like to confuse the issue with nonsense.

That's it, in a nutshell.

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A word of caution : RB ain't no Bubb.

And another word: RB got the stock market correction right. The jury is out for a little while longer on the HPC although some areas are already in crash mode if you take the quarterly drops and annualize them! My bullish stance on the dollar awaits.

Oh yes, and RB was bearish on gold ahwn it was heading toward the $750 mark. Where are we today, $580 or so?

And what advice has Sledgehead given that has come to pass? Probably none because his purpose is just to Troll and attack the bears! <_<

btw--A good day in NY has wrought a similar move in London! Monkey see, monkey do.

Edited by Realistbear

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btw--A good day in NY has wrought a similar move in London! Monkey see, monkey do.

So how come the bad day in NY, didn't equate to a bad day London yesterday? Were the Monkeys not looking?

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So how come the bad day in NY, didn't equate to a bad day London yesterday? Were the Monkeys not looking?

An inconsistent day for the copycat monkey! Back to the routine today, so far:

FTSE 100 5,782.70 104.10 1.83%

FTSE techMark 1,339.26 18.73 1.42%

Dow Jones 11,072.58 99.02 0.90%

S&P 500 1,257.72 11.72 0.94%

Word from NY seems to be that the overall health US economy will not be affected by a few more IR hikes and no one cares about the HPC on the 2 coasts. As Alan "Big Al" Greenspan said a year or so ago: the "froth" markets will see some pain but the overall housing market has remained relatively subdued. In the UK the housing market is ALL froth!

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http://today.reuters.co.uk/investing/finan...-C2-AlsoToday-7

Sterling hits 2-month lows as rate hike talk cools

Thu Jun 29, 2006 3:38 PM BST

By Carolyn Cohn

LONDON, June 29 (Reuters) - Sterling hit a two-month low against the dollar, euro and a trade-weighted basket on Thursday after Bank of England policymakers cooled talk of a British interest rate rise.
Governor Mervyn King told a parliamentary committee discussing the BoE's May inflation report that the economy continued to experience steady growth and low inflation. He also said sterling was at a higher level since May, which would tend to have a disinflationary impact on the economy.
Fellow Monetary Policy Committee member Kate Barker said it was comforting that inflation expectations had receded in the latest BoE survey.

Something has to give as the miracle unwravels. The BoE say no inflation in the UK, unlike everywhere else in the world (apart from the non-discretionaries of course: houses, fuel, train fares, gas & electricity, council taxes....) so it looks like Gordon is going for the sterling devaluation option unlike Ben at the Fed who is chosing the recession option.

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And what advice has Sledgehead given that has come to pass? Probably none because his purpose is just to Troll and attack the bears! <_<

???? Think you need to A ) remember what I have shown you and told you, B ) do a search of my posts.

Besides, didn't your Christain apologetics training teach you about Ad Hominem debating falacies?

So how come the bad day in NY, didn't equate to a bad day London yesterday? Were the Monkeys not looking?

If you look at the performance of the ftse and adjust its performance into dollar equivalence, you will find it has a much closer correlation with the US market, infact, you can lay them on top of each other. Only RB could a ) predict a dollar rebound, b ) f@ck up on ftse and c ) not realise why.

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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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