Thursday, November 6, 2008
Sterling Still Holding
Euro down, pound edges up after rate cuts
"The massive cut by the BoE may ultimately prove positive for the pound, as currency markets begin to factor in the simulative effects of lower U.K. rates," said Boris Schlossberg, director of currency research at Global Forex Trading in New York. Still, the potential for a continued rise in risk aversion amid unsettled financial conditions is likely to leave the euro and the pound under pressure against the dollar, said strategists at Commerzbank.
Posted by plato @ 04:51 PM (931 views)
13 thoughts on “Sterling Still Holding”
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japanese uncle says:
Puzzling… Let’s see what will follow for the coming weeks.
jack c says:
The pound has since (like FTSE) corrected downwards – newsvote.bbc.co.uk/1/shared/fds/hi/business/market_data/currency/default.stm
techieman says:
Commerzagain???
harold says:
Massive central bank intervention buying £s.
the haunted says:
It won’t last.
Fjcruiser says:
always a rational explanation to an irrational behaviour then.
mountain goat says:
what a load of …. “ultimately prove positive for the pound” yeah like ultimately now 6 hours later
Peeps says:
The markets know that both the BoE and the ECB are going to follow the Fed’s lead down to zero and the Euro now has 25 points more to cut.
stillthinking says:
I read some comment or another somewhere else, and the the comment was essentially that supply and demand are the same. I produce goods as supply, and the goods I want in return represent my demand, and that money is the intermediary. To cut it down, in essence, the comment suggested that fiddling with the money supply does not stimulate demand. I make cheese, and when I make a ton of cheese I swop it for 50 video recorders. Then somebody increases the money supply ( or attempts to), but that won’t increase my need for video recorders and it also doesn’t increase their need for cheese. So its kind of a scorched earch policy to stimulate demand through appropriation.
sirgoogle says:
In my opinion the Central bnaks have now primed the pumps for inflation. I think inflation is the only way out of this mess. Burn away the debts. Unfortunately, unless you own an asset or commodity that people want you will lose out.
I suggest that the best thing to do is not to have savings as these will be whittled away bu the banks lending it out and not passing the benefits to you.
Shame from this situation is that our wages will not keep up.
All as a result of the carry trade on the currencies, rocketting speculative house prices, illegal granting of mortgages and the unethical/illegal reselling of mortgage debt.
plato says:
No where near as bad as I expected following the ‘correction’. Thought we were going to see below 1.20 at end of the day against euro !!!
bellwether says:
Guess its not all about interest rates. There are worries about the EU generally and also whether it is doing enough to salvage matters by not cutting rates. For what its worth think both currencies have a poor medium term future.
planning4acrash says:
Edging up? Well, they are anticipating that others will fall fast, and that UK is reaching the bottom of its rout in IR cuts.