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Sterling Near Record Low Before Rate Decision

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http://www.telegraph.co.uk/money/main.jhtm...bcnpound106.xml

The pound slid close to an all-time low against the euro amid growing despondency about the health of the UK economy.

In the UK, consumer confidence fell to its lowest level since comparable records, compiled by Nationwide, began four years ago, a report yesterday showed. That pushed the euro up to 76.89p, the highest since the single European currency was introduced in 1999.

"Yet again the data is an indication that the UK economy is slowing, and that puts further pressure on the MPC," said Jeremy Stretch, strategist at Rabobank. "It's a case that sterling continues to be seen as the ugly sister to the dollar."

Sterling, which was trading at 76.77p against the euro, is now down almost 5pc against the European currency this year. The falls came even though the Bank of England is expected to keep the cost of borrowing on hold at 5.25pc when the Monetary Policy Committee announces its latest interest rate decision at noon today.

The MPC is still forecast to cut rates again by May, even as the European Central Bank keeps its own interest rate steady in the face of rising inflation.

Lord George, the former governor of the Bank of England, told a conference in Edinburgh yesterday: "I used to be the Bank of England governor, and I'm rather glad that I'm not today."

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The lowest I saw it was 1.3002!

That was close!

Yeah, I´m at a loose end this morning, so I´ve been watching it (sad, I know :lol:) and 3 times it´s hit 1.3002 now! Mythical ppt in force?

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Yeah, I´m at a loose end this morning, so I´ve been watching it (sad, I know :lol:) and 3 times it´s hit 1.3002 now! Mythical ppt in force?

probabbly, any 'mythical force' will soon be overcome by market forces, they are much stronger than any goverment.

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people betting on an unexpected rate cut, perhaps?

If I read the charts correctly our currency is being battered all around the globe not just in Euro terms :o

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http://www.telegraph.co.uk/money/main.jhtm...bcnpound106.xml

The pound slid close to an all-time low against the euro amid growing despondency about the health of the UK economy.

In the UK, consumer confidence fell to its lowest level since comparable records, compiled by Nationwide, began four years ago, a report yesterday showed. That pushed the euro up to 76.89p, the highest since the single European currency was introduced in 1999.

"Yet again the data is an indication that the UK economy is slowing, and that puts further pressure on the MPC," said Jeremy Stretch, strategist at Rabobank. "It's a case that sterling continues to be seen as the ugly sister to the dollar."

Sterling, which was trading at 76.77p against the euro, is now down almost 5pc against the European currency this year. The falls came even though the Bank of England is expected to keep the cost of borrowing on hold at 5.25pc when the Monetary Policy Committee announces its latest interest rate decision at noon today.

The MPC is still forecast to cut rates again by May, even as the European Central Bank keeps its own interest rate steady in the face of rising inflation.

Lord George, the former governor of the Bank of England, told a conference in Edinburgh yesterday: "I used to be the Bank of England governor, and I'm rather glad that I'm not today."

Thing is, I want Sterling to get battered as I work for a multinational.. and to the beancounter zombies at head office (if you're reading this, no offence), a drop in Sterling means I cost less... which is what they live for. (AFAICT)

Add in some nice imported inflation and there shrinks the mortgage mountain.

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GBPEUR=X 1 6 Mar 1.3033

Merv saved the day! Sterling soaring away from the break-down point. Gord must be sighing with relief.

Edited by Realistbear

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Thing is, I want Sterling to get battered as I work for a multinational.. and to the beancounter zombies at head office (if you're reading this, no offence), a drop in Sterling means I cost less... which is what they live for. (AFAICT)

Add in some nice imported inflation and there shrinks the mortgage mountain.

only if your take home pay goes up.

If you have to spend all your spare cash on petrol and food, it doesn't help much at all. :(

Err... I think so anyway.

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$2.00 in full sight too.

GBPEUR=X 1 6 Mar 1.3048

Up up up----------------

Gordon's miracle still has legs.

IMO, not much will happen until the storm from accross the Atlantic hits in the form of unemployment, trade deficits, falling house prices, strikes in the civil service sector and massive rises in reposessions. It has begun but its not far along enough for anyone to really notice. The currency traders think Gordon can keep the plates spinning for at least another 90 days before they pull the plug on sterling in a very real way.

Short term sterling is safe vs. the US$ all the time Merv is seen to be sacrificing houses for the greater good of the economy-- i.e. inflation watch.

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GBPEUR=X 1 6 Mar 1.3048

Up up up----------------

Gordon's miracle still has legs.

IMO, not much will happen until the storm from accross the Atlantic hits in the form of unemployment, trade deficits, falling house prices, strikes in the civil service sector and massive rises in reposessions. It has begun but its not far along enough for anyone to really notice. The currency traders think Gordon can keep the plates spinning for at least another 90 days before they pull the plug on sterling in a very real way.

Short term sterling is safe vs. the US$ all the time Merv is seen to be sacrificing houses for the greater good of the economy-- i.e. inflation watch.

I'm hoping for a savage drop in the rate too. I agree we will have to see things deteriorate here too. The question is when.

Trouble is we have exited the Christmas credit card bill period without too much screaming. Maybe there's another year to go before the real pain begins.

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Is there a case to argue that the USD will rise from the ashes ( aka RB, well priced big export manufacturers such as CAT, Deere etc) and the Euro will remain strong ( ECB tough on inflation, high quality export industries etc) whereas Sterling ends up weakening against both the $ and the Euro as there is little to justify its strength ?

In other words, Sterling loses its place at the top table and becomes a minority player.

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Still up above $ 2..has the world gone mad? :o

I might still buy that California house near Sierra afterall... It is now £75000 for a 3bed/3 baths newbuilt...

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I think the penny is beginning to drop.

Bernanke who is an expert on the Great Depression and what he believes the failure of Japan to act decisively, is doing a text book solution to deflation.

It is clear from his earlier pronouncements that he is not worried about price falls per se but that deflation indicates a general fall in demand - this he believes to be a criminal waste of people and resources.

So what is he doing - reducing interest rates aggressively, encouraging fiscal stimuli and supporting banks. He stands ready to encourage the government to spend on behalf of the consumer if the consumer fails so to do.

To work, Bernanke is looking at reflation and a pick up in demand. Unfortunately investors are simply continuing to direct credit away from areas where they could lose money (houses, stocks) and towards commodities. The spike in commodities is being exacerbated by a fall in the exchange rate.

He is getting the wrong kind of inflation. That will of itself bear down on real consumer demand as it reduces spending power. Bernanke may well continue to think he needs to do this so that consumers and banks are helped out of the housing crisis. However, as this part of the story has yet to hit Europe, we clearly can take a different approach.

Indeed. Ben has failed to read the wind direction correctly. The psyche of the market is RISK AVERSION. It is no point stimulating a market in which no one wants to buy. THis is precisely why his IR policy is backfiring.

What should he do? Let Warren Buffet run the shop for awhile so he can learn about pendulums and the swing in economic sentiment.

Cue Obie One Kenobe: Go with the force Ben, don't resist it. Go with it and it will work for you not against you.

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A large number of MPs used to be layers... is it any wonder ;p

Even I think the Dollar is getting towards being oversold now. There just don't seem to me to be any fundamentals to justify the sharp rise in the Euro against Sterling and the Dollar. I reckon shorting the Euro is the percentage play right now.

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Even I think the Dollar is getting towards being oversold now. There just don't seem to me to be any fundamentals to justify the sharp rise in the Euro against Sterling and the Dollar. I reckon shorting the Euro is the percentage play right now.

Indeed surely the impact of the reported slow down in the Southern Euro zone economies and the affect of the weak dollar on exports must be priced in at some point... maybe everyone has their eye off of what is happening on the continent?

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  • 295 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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