Tuesday, July 3, 2007

Pound soars agianst US Dollar

Dollar takes a pounding

Stirling has soared to a 26-year-high against the dollar. So it looks like an interest rate rise may be left for another month.

Posted by enuii @ 08:48 PM (374 views)
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10 thoughts on “Pound soars agianst US Dollar

  • I would be stunned if they don’t raise next month. I’m saying they don’t care about the exchange rate, but it doesn’t currently have the same importance it has had in the past. CPI notwithstanding, King et al have (belatedly) that interest rates have been too low for too long and are the primary cause of both astronomical property prices and the credit junkie epidemic. They know interest rates have to rise to stop these problems getting worse.

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  • I would be stunned if they don’t raise Thursday.

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  • Sorry, I meant “this month” not “next month”, i.e. Thursday.

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  • Current rate has Thursday’s 0.25 rise built in.

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  • Generally, the market places itself to a position before the arrival of the event.
    With this I mean that if the interest rates are expected to go up the rise of Pound Vs Dollar will be seen before the rise and the traders would have closed there positions before that.

    Hence no chance of not having a rate rise.
    On the other hand US had a $880 billion dollar loss in one year, (and also same year on year) the curreny will loose value as the US govt. is printing them as if they are going out of fashion to pay for losses.

    Hope this helps

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  • dohousescrashinthewoods says:

    I’m with Deepak here. If the pound is up it means people are betting on a rise.
    If a rise doesn’t come, the pound will fall back sharply.

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  • japanese uncle says:

    HPC will bring down sterling as well, as foreign speculators’ money will be quickly withdrawn from the UK market. Drop by 20% easy.

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  • talking rot says:

    A thought. If the pound is up, then inflationary pressures are reduced. So the need for a rise is reduced. So by letting the markets believe there will be a rise, King’s job is done for him and he doesn’t have to annoy that scarey new prime minister by raising interest rates.

    Besides, I wonder what will happen is King is out voted again?

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  • Stoatgobbler says:

    Cable is heading to 2.30, in my view, mainly on the back of a USD bust, but the consequences will be tough here.

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  • Not necessarily,

    Don’t forget that certain unpleasant persons need to make a run for cover … (oops I mean the polls)!

    snap election November 2007… IR rises start in ernest in January 2008 ?

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