Buzzy--Bee

You're right - seems there is a bug in UKForex software - if you go to GBP/AUD and select recent day it actually shows recent year - hence my error.



Buzzy

ed_the_lad

If U.K interest rates increase,less people will invest as it costs more to borrow.
Money goes into savings accounts and you get a higher interest on your savings.When the borrowing rate decreases people are more inclined to borrow and invest.Now the high rollers, companies and individuals who have hundreds of millions in bank accounts tend to move the cash around to wherever they get the best rate.The bank of England knows this, so if they
increase the interest rate they also increase the exchange rate as there waiting for a big influx of foreign cash.
There are too many variables to consider in this whole process, this is just one variable that effects the final currency outcome.

OzTennis

The UK had it's biggest rise in the inflation rate since 1997 last month, reported yesterday - pushed off the front pages by the break up of Wills and Kate and some less important event in Virginia. There will be added pressure on the BofE Monetary Policy Committee to do something about interest rates, to dampen down inflationary pressures.

OzTennis

Jensen Healey

Back up to 2.4055 at the moment.

OzTennis

OzForex daily commentary:

"Great Britain Pound: The pound finally achieved the much talked about mark of 2 US dollars overnight, propelling it to further highs. Initial gains came following stronger than expected consumer inflation figures, which were just enough to push GBP/USD over the 2.00 mark. Further gains came throughout European and US trading, with gains held firm by the release of softer than expected US CPI numbers. Last night’s data was significant in that gains against the USD were driven by strong UK figures whereas previous gains were dominated by weak US data. As a result, the pound has made a good comeback against the AUD which opens this morning at 2.4002 and the NZD, which is currently trading at 2.6967. Tonight’s release of BoE minutes will generate further activity.

- We expect a range today in the GBP/AUD rate of 2.3925 to 2.4025"

OzTennis

chrispy

Bit out of date, from the above post it has already gone above that! Long may it continue (or at least until we have changed all our money )

OzTennis

Well, it is was their prediction at the start of play for the rate. Anyone who can accurately predict exchange rates with a small starting kitty can be a billionaire!

OzTennis

geordie downunder

People seem to think wealthy people have money in the bank,a very common misconception,and a wrong one.

To use Frank Lowy and Westfield as an example,W/field have $247 million cash in hand.They have a debt of $25.2 billion,they operate the same as a household but on a much larger scale.Mortgages are paid from cashflow,same as a household,the cash in hand is a safety margin,same as joe blow would have a bit in the bank as a safety margin.

They also tend to go for fixed rates rather than variable,being a large company they can cut out the middle man (banks).They can offer bonds or debentures to pension/super/mutual funds.There should be a capital raising in the UK to help pay for that big White city project in London,or it could be going through now.

As most of their shopping centres are in the US they raise funds there,Washington mutual (mutual fund) have around $1 billion of W/field debt fixed for 5 yrs at around 5.2%.

As it is a family owned company,then frank and the family own 177 million shares in it.Like most companies the rest is owned by small shareholders such as myself,and pension/super/mutual funds.the largest shareholder is J P Morgan with 271 million shares,they are a US investment bank and probably hold those shares as a master wrap for US mutual funds. HSBC own 80 million on behalf of Uk pension funds.

Rather than put money where the high interest rates are as you suggest,they leave money where it has been since 1960,in company shares.the dividend income from their shares last year was @ $200 million.That should rise next year as profits rise,dividend has risen every year for as long as i have had shares in the company.Return on the stock last year was 30%,the bank will never give me 30% so why put money there,apart from the money as a safety margin to pay interest.

There is more to currency movements than will ever be put on the board,borrow money in japan at 2%, short stock in Aus ,make a killing if you have chosen right.Put the same money in the bank in Oz and get 6.5% on it.Same money again,go long on stock and sell call options,make a fortune if you call it right.

Cemex buy a lot of A$ to buy rinker,currencies move.Rio tinto etc are paid in US dollars through the LME,they convert to A$ for the unhedged part,currencies move.Qantas buy a few 747's ,currencies move.Hedge funds take the piss,currencies move.Nic Leeson sends a bank bust on forex trading,currencies move.

Traders at NAB commit fraud to hide their losses on forex,currencies move,and NAB share price plunges.

I don't think anybody could ever explain why it happens.There would be more financial calculations go through Nic Leesons head in 5 seconds than would go through the board in a lifetime.

My 2 cents worth.

OzTennis

Yep, well argued.

Wealth and cash aren't of course the same thing; stories of the Queen not carrying cash are rife; cash being the most liquid asset, it carries no return (negative return with inflation). It is one of life's ironies that the poorest carry a higher proportion of their wealth in cash than the wealthy. Indeed over 30% of people in most advanced countries don't even have a bank account and so can't earn interest.

The trick might be to borrow money from Muslims who don't believe in interest and then invest the funds in a non-Muslim high returning asset!

A favourite trick of Jack Charlton when he was manager of Ireland was to walk into a bar, shout a round for all the punters and pay by cheque. The landlord, so proud of the signed Charlton cheque would frame it and put it on prominent display and of course it would never be presented for payment at the Bank of Ashington or whoever he banked with. Moral - if you are rich or famous, pay by cheque or pretend not to carry cash (or horrid plastic).

A nice phrase I saw yonks ago:

'Many a buck (pound or whatever) was lost for the want of a buck in the first place'.

OzTennis

geordie downunder

Takes a lot of poor people to make one wealthy person,they have to put the money in the bank so the wealthy person can borrow it.

The whole financial industry is one big piss take.I think Warren Buffet sums it up perfectly "if they knew what was going to happen they'd be buying shares,not selling advice".

Daily turnover on the ASX is around $5 billion,more on a good day when greed or panic rule.All those brokers with their buy and sell recommendations,the more they can fool people into buying and selling,the higher the turnover,the higher the turnover ,the bigger their %age cut is.Nice to get your hands on a %age of $5 billion every day.

Buffet's letter to shareholders should be compulsory teaching in schools,never going to happen.

my little rant over.

stuckinblighty

I have no cash

I have no assets

I'm poor

louise4

ah, but i bet your rich in love

























bloody hope so or you really are a poor sod

geordie downunder

Look on the bright side though

Money can't buy happiness

Poverty on the other hand

Perhaps not a good example.

OzTennis

Yep again.

How about the UK Hedge Fund manager in the news last week who will receive an annual bonus this year (not his salary, a bonus) of £120 mill? This for successfully gambling with other punters money (does everything from betting on currencies falling and rising, commodity prices falling and rising, share prices falling and rising. leveraged buy-outs etc). He said he likes to spend some of his money treating his parents and other family members to a good holiday! He probably has things in mind like buying Venice and closing it off to the public for the family holiday.

OzTennis

stariston

Well close to 2.36
Could there be an interest rise in uk