Fly Away

I've been watching it too and was disapointed it didn't spike up.

This Ozforex graph is a good indicator of the general trend

http://www.ozforex.com/cgi-bin/chartsFast.as

Mrs Kiwi

I also thought the rate would get better in the favour of £ after the Oz interest rate cut - however the rate has improved after the recent UK interest rate cuts so maybe we should wait for that on Thursday - apparently the Bank of England will be cutting rates again.

Not sure how it works though - if the amount of $ to the £ goes up after UK interest rate cuts, why would it also improve after Oz interest rate cuts?

DownUnderPaddy

Laws of logic and economics have applied as reasonably reliable predictors in the past. In seems in the current interesting times we live in at the moment however that these can no longer be relied on. It is all a fascinating gambling/guessing game now

MrCro

yep not looking good, was so positive Friday as the £ was climbing and hoped that a 1% cut in Oz would do same to $ as it did in NZ.

But a few things have gone against the £ over the last few days:-

1) The increasing wildcat strikes over foreign workers in UK put fear into investors
2) A large % of city forex traders never even got into the office yesterday due to snow
3) Some of our banks were downgraded Monday
4) Oz threw in a £20billion stimulus on same day that the dropped 1% interest rate cut (although all is only proposed and has to be passed throught senate)
5) Plus our interest rate due again THurs with another 0.5% expected.

So it remains to be seen what will happen between the £ vs A$

If BofE were to leave interest rate alone this month I think that could really cause a £ bounce back, lets face it we are well ahead now on the interest rates and when they lower any further it will not be passed on as majority of lenders have a 2% minimum on their mortgages. therefore you can never end up paying any less on your tracker so what's point in dropping to say 0.5% eventually as that will not give the population extra spend to inject into the economy???

The £ is still completely undervalued and has been bullied in the forex world, other nations are all heading in the same direction of recession and Rudds stimulus plan proves that Australia is no exeption. Yet UK seems to have been picked out as the worst without any true justification and will bounce back!!!

DownUnderPaddy

Well, here's a graph of the week that was.
Neither the AUS 1% cut or the UK .5% cut appear to have made any difference. Worse actually if you look at the start of the week.

It really does appear to indicate that all of those cuts were already well priced in by the market. Spikes may come and go certainly, but I don't think there is anything out there at the moment that offers any kind of reliable prediction as to which way the exchange rate will go or how it will react to perceived events.

You gotta love the big fat disclaimer ForexYard have on their site which is pure admission of this fact...

Investment in the currency exchange is highly speculative and should only be done with risk capital. Prices rise and fall and past performance is no assurance of future performance. This and any analysis published or received from FOREXYARD is for informational use. Accordingly we make no warranties or guarantees in respect of the content. The publications herein do not take into account the investment objectives, financial situation or particular needs of any particular person. Investors should obtain individual financial advice based on their own particular circumstances before making an investment decision on the basis of the recommendations in the analyses. While we try to ensure that all of the information provided is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. FOREXYARD will not be held responsible for the reliability or accuracy of the information available. The content herein is provided in good faith and believed to be accurate; however, there are no explicit or implicit warranties of accuracy or timeliness made FOREXYARD or its affiliates. The reader agrees not to hold FOREXYARD or any of its affiliates liable for decisions that are based on information from this website. FOREXYARD highly recommends that before making a decision, the reader collects several opinions related to the decision and verifies facts from at least several independent sources.

autorock

Spot on DUP. I think interest rates are irrelevant now as there's practically no return either way now...

I think trading is more about who's economy is headed for the toilet faster on any given day...

Where it goes next is in the lap of the Odds!

DownUnderPaddy

Lap of the ODDS !!! Brilliant
I will steal that one from you for future use if you don't mind

autorock

Go for it Mate! I hope the Odds are in your favour!

Mrs Kiwi

Lap of the Odds sounds about right - I like it!
I'm not expecting any major spikes anytime soon- autorock you summed it up perfectly by saying it depends whose economy is headed for the toilet most on any particular day!

DownUnderPaddy

Looks like I posted that comment a bit prematurely.
By the close of trading on Friday it had dropped another couple of cents.

In fact if you look at the graph for the last 30 days, it's on a real downward slide at the moment...

Doubtless it will rally a little at the start of trading again on Monday morning, but I think next week will be very interesting to see if it continues it's current direction.....

MrCro

I've noticed a couple of things watching this now, Fridays are interesting last Friday £ was climbing suddenly and this week its dropping suddenly. It's like loads of last minute activity before the market closes for the weekend.

The difference was 10cents Fri to Fri close so IF I had £100k to play with and sent it last Friday and brought it back this Friday that would = about £4k profit!!! Sounds easy and I wish it was but thats because now I know it dropped, anyone buying AUD last week when £ was flying up (and interest rate cuts due week after) you would think needed their head testing.

The other thing I've noticed by mistake this week is that the £ to AUD price has everything to do with how strong the AUD is against the USD regardless of how well the £ is against USD.

I discovered this by opening a duplicate chart on fxtrek and when you put a AUD/USD chart above the GBP/AUD chart it is pretty much a mirror image!!!

So as the AUD got stronger towards the end of the week against the USD (which happened after 1% interest and stimulus announcement) the £ bought less AUD.

Whereas the £ was also getting stronger against the USD and EURO in the week after annoucements of BoE and Euro bank interest rates. But this did not have any affect on AUD price to the £.

Forex is a weird and wonderful world??

autorock

For anyone who believes in Technical Analysis, there seems to be a channel forming!??!

My theory is that until there's another big fundamental driver, it'll be good old fashioned TA driving the chart (ie. human emotion). Especially since fundamentals such as interest rates, stimulus packages, failing banks with balance sheets 40 x GDP (yikes!) and the like seem to be having little or no effect any more.

Lets ee what happens when it hits that bottom trend line next...

The last such upward trend-line lasted about 3-4 months...

(May be wishful thinking on my part as I'm hoping against hope for a stronger ££!)

Thoughts?!?

Fly Away

I'm with you.... hesitated about going for 2.25 but didn't... will wait it out, I think it will climb up very slowly... well I am hoping so...no science here, just hope...

MrCro

I'm all for some good old TA taking over this chart! Is that the interactive charts off yahoo.com (USA) you have used? How do you get the lines on as all I can see on there are the standard TA indicater tools (Bollinger Bands, MACD etc)??

What is you next rate that the next cross over touch is on that bottom trend line, be very interesting if it hits that line and bounces! About 2.15 looking at the chart you posted???

Cheers

Damson

I find the Hi-Fx currency rate chart (in Java) brilliant as I like to watch the up-to-the-second rates flashing up - saddo I know!