Friday, January 18, 2008

I can hear laughs from across the pond

Sinking Sterling Is Catching Dollar's Disease

the air has begun to leak from one of the world's biggest financial bubbles: the pound sterling. Not only is the pound weakening, it's going the way of the dollar for many of the same reasons that have plagued the U.S. currency: a deflating housing bubble, a large trade deficit and the prospect of lower interest rates. Both the U.K. and U.S. also have financial industries reeling from the subprime-mortgage crisis and related credit crunch that augur the probability of large layoffs. All of these suggest sterling has further to fall.

Posted by confused76 @ 11:59 AM (757 views)
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4 thoughts on “I can hear laughs from across the pond

  • sold 2 rent 1 says:

    The EUR is next. Not sure when though.

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  • I was thinking of bringing some savings over to the euro zone, but decided against as it really is extremely volatile at the moment. If I had done the transfer I would have lost money. that could all change, but I am very concerned about doing any transfer now, as the exchange rates are going up and down like a yoyo, and there are rumblings in euroland about an economic slowdon and necessity for rate cuts here, both Euroland and UK have big inflation problems, and both face economic slowdon, trying times for both the ECB and BoE, and all of us with savings in the UK and livelihoods in Euroland. Anyone else in the same position, advice would be great.

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  • What we have been observing in the past 2 months is pound weakness, not Euro strength. Notice the Eur/USD has hardly changed.
    Pound will weaken more, probably down to dollar/pound 1.80, and eur/pound 1.2. By the end of 08 the Eur will start weaken vs both USD and GBP.
    I agree the eur stability will be a big issue, but not this year (yet)

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  • The Eur is likely to weaken long before the end of 2008. Get some American put options on the Euro bought.

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