Stu Ward

Sterling seems to be slipping her grip again

littda01

IMO it'll be pretty shocking if Sterling does anything other than stagnate over the next few years. The economic position is just too poor to allow much else. There'll be rallies here and there sure, but difficult to see the UK economy moving much ahead overall.

That said, who'd have predicted the Euro hitting the skids? Few months ago all the talk was of it being the new reserve currency. Only reason for the GBP rally was movement away from the Euro (with the $ being the main beneficiary).

But now the Euro crisis has abated for the time being, the £ and $ are on the way back down as people regain their appetite for risk.

So you never know, but if I had any GBPs I wouldnt be sitting around expecting a big rise.

DownUnderPaddy

Aye. 1.71 - heading back to 'normal' 1.6 territory...... Kudos to those that exchanged during the brief surge over the last week !

freebo

AUD strengthens today as it looks the the mining tax is going to be watered down significantly. Recent moves have been off the back of risk aversion and AUD weakness, again partly due to the proposed mining tax. Against other currencies GBP has been weak since before the election, I recently bought some AUD at 1.76, but only enough to cover my short term needs.

Gold has stayed strong through all of it

MrCro

AUD has only enjoyed abit of a bounce as stockmarkets have had a bit of a relief rally!

US markets not opened too strong though so it's started slipping again, think its USA bank holiday this weekend so will be thin trading today which can show high gains or losses even tho not much has traded.

Will see what next week brings but you can bet one thing, if markets are down then £ will get stronger against AUD and visa versa!

koalakim

Hi Folks

Have been away for a week on my way to Blighty and running around the UK seeing people!

You can thank me personally for the rise in the pound! Leaving Oz last week we knew we'd be out of touch for a few days and as the pound bounced back up to the heady heights of 1.67 (best it had been since the election and knowing it hasn't been past this for few months or so) we decided to exchange the last of our money............and then we get back to Blighty and found out it had gone into the 1.70's! Were we flipping annoyed or WHAT having said I suppose it was no guess it was going to happen knowing the luck we have had on exchaging money!

So I hope some of you managed to take advantage of it!

Anyway, back here in sunny UK we've had some lovely weather although it has gone a bit chilly again. The high streets seem to be bustling despite a lot of closed shops - Brighton is heaving! Everyone seems resigned to the fact that things will be tough soon, talk of VAT and CGT rises. I have to say even though the A$ is strong things seem very cheap here, clothes, food etc. I've even managed to have a decent cup of coffee in Costa's! Places like Weatherspoons pubs are doing good deals on food and booze - so it's not all bad over here!

KK

77hil

Listening to Radio 4 the other day and one analyst said that a lot of the growth estimations are likely to be revised upwards fairly significantly into the second half of 2010. There was an overall feeling that things are actually much better in the UK than people think. With St Georges also forcasting a return to $2:£1 by the end of 2010. As a result I wouldn't be too bearish about the £. Fingers crossed though that the guy is right!

mikewest

Aye Weatherspons, after all these years they still can't do a decent egg and chips. They manage cheap decent beer though so they ain't all bad.

Wait until after the budget to see a weak pound though, not the day after but a couple of weeks.

MrCro

My aussie cousins were annoyed that Weatherspoons sold Bundaberg and coke half the price they pay in Oz! That's on a product that has been shipped around the world and all export duties paid!

Good old weatherspoons! It's the only place I know where I can go for a bundy now and again and pretend I'm cabk in Oz!!

Breakfasts pretty good too!

£ will come back just who knows when!!??everything priced in to get it to these lows, main factor will be how the aussie holds up against US$.

freebo

Actually AUDJPY is the one to watch, its currently the best risk on/risk off indicator out there...

MrCro

agreed, that is a major carry trade as the Japanese are very financially savvy and as they pay almost zero interest on borrowed yen so they can borrow alot and enjoy high return on their aussie dollars.

my gut instinct is we are heading for another big unwind in risk and stocks etc, not good from one point of view but then my £'s will buy more A$.

there's alot of catalysts brewing at mo that may affect things, war in korea, BP leak in states may take 2 months to stop (if they can!), euro worries, china slow down to avoid bubble burst etc etc. I think 2nd half of this year will be alot different to last year!

freebo

Karma for that, or I agree in other words, although the timing is always impossible to nail down. Not sure what another crash will do for my job as I'm working in an investment bank. The carry is the whole financial world borrowing JPY to buy AUD, not just the Japanese though and the unwind will be brutal whenever it comes.

As a newcomer I'd have to say that Australia is absolutely booming, who knows if that will continue, but at least I'm earning AUD's.

wilf70

As usual read Freebo's and Mr cro's threads with interest.But a factor you mention,but I think underestimate is the Korean 'thing'.At the moment most people think that any conflict will be unintended but would spread quickly[I'm not so sure--the nth korean leadership is not rational].But a premeditated invasion is low--but how many pundits would have said;a few weeks ago, that the nth koreans would deliberately sink a sth korean ship.The level of tension[and therefore accidental war] can be judged by the fact that the nth koreans allowed the meeting of their military command cttee to be filmed by foreign media.This is a measure of how belligerent they feel.Relations between nth and sth have been deteriorating for about 18 mths and the leadership is becoming evermore erratic.Despite an economic boom the sth is very concerned[allegedly]about its sovereign debt and recently had meetings with members of the credit rating agencies to reassure them as to how it intends to deal with the problem of the decrepit and destitute nth.Don't forget that the korean won has fallen by 12% since May.If panic breaks out it is possible that the sth may try to ressurrect its currency swap arrangement with the Federal reserve as an insurance policy.As for China having influence/power over the nth--if that were the case would they have torpedoed a sth korean warship without first getting thier say-so??.China just wants to contain the crisis not take it off the boil--its a distraction for the US from such things as China not raising the Yuan against the $.The Dear-leader likes to shout the odds now and again--but this time I sense it is different;he is elderly and ill[had a stroke] and other factions are making power plays and this is his reply.In the past he has shown himself to be an excellent poker player but this time has he decided to go out in a 'blaze of glory'??.My guess;for what its worth is some form of run on the markets;a military confrontation probably at sea over something like fishing rights and then a much larger conflict that has the potential to get fully out of control.Remember both the sth and the US fleet are at sea and on alert at the moment and elements of the Russian navy are soon to carry out training exercises off the coast.Also the sth is on an alert that is one level below imminent conflict---all it need is some nervous soldier to make a mistake.

MrCro

That's my double edge sword, boom good as can arrive and earn $'s and we won't be buying property straight away anyway so can wait for better fx rate!

BUT if get decent exchange rate then less presure to work straight away as will have loads more $'s!!!

Tough having money now! When I first went to work in Oz aged 19 I had no money so didn't care!

freebo

I remember a quote from someone (must google it)...

"I've been rich and I've been poor, rich is better"

I wish!