Danny B

I think the Canadians are fearing the worst
http://news.bbc.co.uk/1/hi/business/7127605.stm

MarkG

Now that the Bank of Canada has shown it will cut rates to reduce the value of the dollar, it's likely to push more speculators out of the market; I certainly wouldn't be surprised to see $2.10+ against the pound in the next few months.

Assuming the Bank of England aren't dumb enough to cut rates, anyway. Despite all the talk, I don't see any way they can justify it myself.

steve666

Justification isn't an issue. They have an agenda. "Nobody knows nothing till it happens." Said my grandma. "Grammer is worthless when you're telling the truth" my mum replied, sardonically.

We just follow and make do, say I.

mclauchlan35

Not so good today, back at 2.05!!

Iain Mc

I think the markets are pricing in the increased likelihood of a UK rate cut tomorrow.

It's pretty volatile at present, if you see a good spot rate on a day like yesterday it might be worth taking advantage!

R I C H

Rumour has it that the US may cut it's interest rates by .5% next week, prompting a rise in the Loonie vs. the US$ again.

dakota44

I always get a kick out of the idea that the Loonie is "rising" against the U.S. dollar. It isn't. The U.S. dollar is "falling" to the level of the Loonie. Makes a difference.

If the U.S. dollar was at the same level, against other world currencies, as it was 3 years ago, and the Loonie reached par with it, then it would be rising.

Unless I go to the U.S., I gain nothing. Three years ago it cost me $1,300 to buy $1,000 U.S....which in turn bought me 3.8 Peruvian Soles. Now it cost me $1,000 to buy $1,000 U.S...which in turn buys me 2.8 Peruvian Soles. No gain. No rise in real value in the Canadian dollar.

MarkG

True. All major currencies have dropped significantly in value over the last five years or so, except against iPods and HDTVs.

geedee

Dropped in value against what? (iPods and HDTVs excepted)

Betfair in the UK are giving best odds on a .25% cut, which will be the worst thing possible for the UK economy, and a disaster for Sterling, although we've seen most of that expectation priced in today.

If it's a hold (unlikely) or raise (even more unlikely, but necessary) Sterling will take off and I think we'll be back to 2.15 within a week or so.

MarkG

Houses, gold, oil, food... what haven't they dropped against other than consumer electronics?

In 2002 oil was around $30 a barrel and gold around $350 an ounce; today oil is near $100 a barrel and gold around $800 an ounce. Just to give two examples.

Even allowing for the rise in the pound against the dollar, it's dropped substantially against both of those.

geedee

True. Will we need wheelbarrows full of cash soon to buy a BigMac?

It's all a bit worrying really!

geedee

I just looked back at page 1 of this thread.... and wept!

dakota44

$800 an ounce gold is not much when you consider that the average price for 1980 was $612 an ounce. factor in inflation, and $800 is not at the same level as 1980

MarkG

Who cares? 1980 was a bubble, and $800 an ounce is a lot more than $350 an ounce was five years ago.

geedee

It was less than 300 in 99/01. How does that tally?