What's happened to the GBP value?

[Baboonanza]

The great thing about the internet is that unconventional, common sense voices are now out there

Which Internet are you on? Mine is full of paranoid conspiracy theorists and general loonies who constantly spout baseless bull**** as fact.

The problem with the Internet is that everyone claims to be an expert and you can find other people to backup/re-enforce whichever bizarre economic theory you care to choose.

 

[silversurfer]

I know theres no way of knowing truly, but does anyone think its likely to recover a bit before the end of the month or by the end of April?

I hate economics.

The trend is down, if anything I expect the decline to accelerate today or next week. 1.40 has been called as a base which might be right since 1.50 is not exceptional poor in the long term, $2 was above par

Apparently its to do with Bond yields. QE is bringing the government debt yield down which makes american debt more attractive and so cash flows to the dollar and other reasons.

If we did have a lot of exporting like north sea oil then people would need to buy sterling but we are a net importer apparently

Also Prudential announced they'll be spending $35.5 billion dollars on AIG so that also is a large transfer of wealth

 

[Dancer]

The sad thing is that we may debate this as much as we like, but our finances (and by extension lives) are in the hands of powers over which we have almost no control. So even if you invest judiciously and plan carefully you may still end up with almost nothing in the end because governments and companies make decisions which renders your choices almost meaningless.

Edit: I'm not saying it's hopeless and that you can't make good decisions that will secure your future somewhat, only that despite hard work and responsibility you might end up with very little to show for it.

 

[Nate--IRL--]

The sad thing is that we may debate this as much as we like, but our finances (and by extension lives) are in the hands of powers over which we have almost no control. So even if you invest judiciously and plan carefully you may still end up with almost nothing in the end because governments and companies make decisions which renders your choices almost meaningless.

Edit: I'm not saying it's hopeless and that you can't make good decisions that will secure your future somewhat, only that despite hard work and responsibility you might end up with very little to show for it.

Such is life. The only power you have is your vote, and it's not much.

Nate

 

[Berserker]

The trend is down, if anything I expect the decline to accelerate today or next week. 1.40 has been called as a base which might be right since 1.50 is not exceptional poor in the long term, $2 was above par

Nonetheless sitting out this weeks events proved the right decision for me - most of the fall resulting from the markets freaking out at the prospect of a hung parliament has now been undone. Net I'm down £2 on a £330 purchase (would have been £10 if I'd panicked). It's not much, but it all helps.

Doesn't stop me wishing for $2 again though - above par or not. It was $2 last time I was out there (pre-Crash).

 

[Destination]

No it's not. A weak currency is ideal for exporters!

What people really start to need to understand is that the rest of the world simply isn't buying in the same amounts they used to.
So talking of a wonderfully crap pound value being great for exports may indeed be true, but only if someone actually buys things at the other end.

We'll see where we end up, but the gutter is where I think we are headed. We have a national debt approaching the value of our GDP, and no matter how well the banks trun around and how much they are eventually sold on for, we will be paying for our current debt, with our weak pound for a generation. 15-20 years mimimum, and the thought of loss of services and increased taxation that means disgusts me, as I know they won't start cutting where it is needed.

 

[Ironic Namesake]

For an import/expert business the currency movements have been fantastic for me - I buy and sell in USD/EUR/GBP and at the current rates I've been doing well - buying in EUR/GBP and selling in USD has been going quite good, although - I'm sure things will change again sometime in the near future!

 

[N9ne]

The trend is down, if anything I expect the decline to accelerate today or next week. 1.40 has been called as a base which might be right since 1.50 is not exceptional poor in the long term, $2 was above par

Apparently its to do with Bond yields. QE is bringing the government debt yield down which makes american debt more attractive and so cash flows to the dollar and other reasons.

If we did have a lot of exporting like north sea oil then people would need to buy sterling but we are a net importer apparently

Also Prudential announced they'll be spending $35.5 billion dollars on AIG so that also is a large transfer of wealth

Disagree.

With a quiet data week next week, and a short-term bull market in equities and risk-sentiment, GBP will do well along with other popular currencies like AUD, CAD, EUR. The USD will lose ground. The market is short the GBP, and they will start taking profit. Others will get long for the short-term. The GBP has been very well supported (moreso than EUR, CAD, AUD) since Prudential's stuff was finished. Prudential sold circa £9bn on Monday, and bought USD. That for now seems to be it and that was the 100% sole reason for the move down to 1.4780. The hung parliament risk has almost no effect on GBP anymore, and is fully priced in.

The media hit a brick wall last week trying to explain GBP's decline. They just don't have enough experienced financial editors to realise that the GBP will get slaughtered given that there isn't that much liquidity to sell ~£10bn in one day. Hung parliament risk is a longer-term theme, and as such, anyone wishing to trade the GBP on the back of that will sell it slowly, and not in large size.

With regards to QE, I think this will be very much a last resort if they do introduce more. It will have a very bad effect on GBP if it does though!

I think short term we stay locked between 1.4850 and 1.5500 against USD. In the next 3-months, we could dip down to 1.4200 (for whatever reason), but 1y+ we should be firmly above 1.5500.

 

[Sankari]

What people really start to need to understand is that the rest of the world simply isn't buying in the same amounts they used to.
So talking of a wonderfully crap pound value being great for exports may indeed be true, but only if someone actually buys things at the other end.

As the world's largest arms exporter for 2007, the UK does not have a problem finding customers.

 

[bliss]

I'm not really clued up on financies and the economy, but is it safe to say that by Oct the pound will be as poor as it is now, or even worse?

 

[Sankari]

That will depend on who's running the country by then.

 

[scorza]

I'm not really clued up on financies and the economy, but is it safe to say that by Oct the pound will be as poor as it is now, or even worse?

A report in The Sunday Times said that they were expecting the pound to be worth EUR 1.20 by the end of the year, although these sort of predictions are often wrong.

 

[Destination]

As the world's largest arms exporter for 2007, the UK does not have a problem finding customers.

Clearly we do, January figures, helped by our haemorrhaging valve of the pound dropped by 6%. The only mitigating factor might be bad weather. Seriously, exports went down 6%, and this is with all the wonderful help and great conditions you speak of.

As I said before, no one is buying. If no one buys then the only people who lose out are us. Our currency is worthless, and our prices increase as the trade deficit went up again.

 

[dowie]

I'm not really clued up on financies and the economy, but is it safe to say that by Oct the pound will be as poor as it is now, or even worse?

no one knows - you can't really predict the future when it comes to stuff like this

Though you will find a lot of slightly deluded people who think they can by looking at charts - it falls under the umbrella of something called 'Technical Analysis' - it looks and sounds scientific but most of it isn't.

Its like 'alternative' medicine masquerading as medicine - there are lots of followers, some of it 'works' via a placebo effect and there isn't actually any real evidence for most of it.

 

[silversurfer]

I was just thinking maybe sterling could recover starting from when they announce the actual election. Often markets will speculate leading up to an event

EUR / GBP has met a negative trend going back to 2008. I really dont expect it to be beaten back but this is the last stand for the sterling bulls.
So sideways, some negativity but eventually I would guess euro to surpass sterling overall in the next year and perhaps quite strongly as this larger trend is broken.

I'll have to see how the news reflects this, or not

 

[Duke]

Confusing graph is confusing.

 

[bliss]

The reason why i asked is because i'm hoping for a trip to Asia this Oct. A week in HK then a week in Kota Kinabalu.

I had the Win7 currency gadgets following both exchanges and it became so depressing i removed them from my desktop lol.

The £ is getting destroyed, even by the Malaysian Ringgit of all things.

Now i know the HKD is firmly fixed to the USD but what does the RM follow?

 

[Ironic Namesake]

The reason why i asked is because i'm hoping for a trip to Asia this Oct. A week in HK then a week in Kota Kinabalu.

I had the Win7 currency gadgets following both exchanges and it became so depressing i removed them from my desktop lol.

The £ is getting destroyed, even by the Malaysian Ringgit of all things.

Now i know the HKD is firmly fixed to the USD but what does the RM follow?

The RM was previously pegged to the USD, it isn't any longer but still follows the USD pretty close

http://www.exchange-rates.org/history/MYR/USD/G

I've been following the RM quite closely as I'm moving there in 2 weeks

 

[bliss]

The RM was previously pegged to the USD, it isn't any longer but still follows the USD pretty close

http://www.exchange-rates.org/history/MYR/USD/G

I've been following the RM quite closely as I'm moving there in 2 weeks

You worried that your £'s will be worth peanuts too? lol.

Just been reading about how the major plan to get us out of this mess was via exports...... and now the news in in that exports are way way down. The UK really is in a mess.

Surely the US should be worse off than us?

 

[Ironic Namesake]

You worried that your £'s will be worth peanuts too? lol.

Just been reading about how the major plan to get us out of this mess was via exports...... and now the news in in that exports are way way down. The UK really is in a mess.

Surely the US should be worse off than us?

Yeah, but if you're coming from UK to Malaysia, it is still fairly cheap even with the change in the currency rates.

I bought a fair amount of USD already actually , but looking to add more when the rate gets better (if it does ... )