Exchange rate

Old May 10th 2007, 12:33 pm
  #121  
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Default Re: Exchange rate

Originally Posted by MarkG View Post
If they cut rates, the US dollar is toast. They can't raise without crashing the economy and they can't cut without crashing the economy. And with Chinese costs and wages increasing, they can't hold without increasing inflation.
Agreed the US is in a world of doo doo.
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Old May 10th 2007, 12:37 pm
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Default Re: Exchange rate

Originally Posted by cneldred View Post
Some of the comments with the rate hike from BOE were hinting at cuts later in the year.
Not with inflation currently at the highest level in a decade: and that's just the fudged inflation numbers, not real inflation.

I'll be surprised if the BoE can cut rates before 2010; I think we're about to see a sustained period of stagflation again as China starts exporting inflation to the West rather than deflation.
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Old May 10th 2007, 12:41 pm
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Default Re: Exchange rate

Originally Posted by cneldred View Post
Agreed the US is in a world of doo doo.
doo doo? Is that a global market economy term for 'in the $hit'?
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Old May 10th 2007, 1:01 pm
  #124  
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Default Re: Exchange rate

Originally Posted by MarkG View Post
Not with inflation currently at the highest level in a decade: and that's just the fudged inflation numbers, not real inflation.

I'll be surprised if the BoE can cut rates before 2010; I think we're about to see a sustained period of stagflation again as China starts exporting inflation to the West rather than deflation.

The comment i was referring to was 'CPI likely to slow to around 2% during the course of 2007'

doo doo, the family friendly version yes.
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Old May 10th 2007, 1:05 pm
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Default Re: Exchange rate

Originally Posted by cneldred View Post
The comment i was referring to was 'CPI likely to slow to around 2% during the course of 2007'
But the BoE have been saying that ever since CPI rose above 2% and they've been wrong the whole time.

The only way CPI will drop to 2% is if Gordon Brown fiddles the figures even worse than he already has, and then the disparity between CPI and RPI will only get more and more blatant. The last time RPI was this high, interest rates were over 10%, but that was back when we had a government that actually tried to keep inflation under control.
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Old May 10th 2007, 1:07 pm
  #126  
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Default Re: Exchange rate

So if the US are in the sh1t, how will this reflect on the Canadian economy or wont it?
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Old May 10th 2007, 1:11 pm
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Default Re: Exchange rate

Originally Posted by Danny B View Post
So if the US are in the sh1t, how will this reflect on the Canadian economy or wont it?
The parts that rely on America will be in the crap too, but I'm not sure about the parts that rely on China (e.g. oil and other resources). China will be hit by a US recession, but I'm not sure if it will be hit hard enough to create a global recession.
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Old May 10th 2007, 1:15 pm
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Default Re: Exchange rate

Originally Posted by MarkG View Post
The parts that rely on America will be in the crap too, but I'm not sure about the parts that rely on China (e.g. oil and other resources). China will be hit by a US recession, but I'm not sure if it will be hit hard enough to create a global recession.
Does anyone agree that Canadian oil is the only buffer Canada has to stop the US problems cascading through their economy?
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Old May 10th 2007, 1:27 pm
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Default Re: Exchange rate

Originally Posted by steve666 View Post
Does anyone agree that Canadian oil is the only buffer Canada has to stop the US problems cascading through their economy?
Not just oil, there are plenty of other things like timber and uranium which China needs and Canada can export. American problems seem most likely to hit the East of the country, while Chinese problems seem most likely to hit the West.

Obviously, as I said, Chinese and American problems are connected, but some economists seem to believe that China won't be hit hard by a US recession while some believe China will be hit even worse than America; so it's hard to tell.
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Old May 10th 2007, 1:36 pm
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Default Re: Exchange rate

European Central Bank just signaled to the market they will raise rates next month, this was expected. Euro should remain strong and may add a little strength to GBP£.
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Old May 10th 2007, 1:46 pm
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Default Re: Exchange rate

Hmmm... Is it me or has the exchange rate got worse by quite a lot in the last two hours or so?
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Old May 10th 2007, 1:52 pm
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Default Re: Exchange rate

Ouch. Yes, I guess that people are selling off pounds now they know the interest rate rise is only 0.25%.
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Old May 10th 2007, 1:58 pm
  #133  
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Default Re: Exchange rate

Originally Posted by cneldred View Post
European Central Bank just signaled to the market they will raise rates next month, this was expected. Euro should remain strong and may add a little strength to GBP£.
Hey Mark and cneldred, is this economy and world market free question/answer service something that'll be available indefinitely?
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Old May 10th 2007, 2:00 pm
  #134  
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Default Re: Exchange rate

Originally Posted by Andthen View Post
Hmmm... Is it me or has the exchange rate got worse by quite a lot in the last two hours or so?
$2.20 where I am looking.
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Old May 10th 2007, 2:02 pm
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Default Re: Exchange rate

Originally Posted by MarkG View Post
Ouch. Yes, I guess that people are selling off pounds now they know the interest rate rise is only 0.25%.
The Times business pages were building up for a .5% rise, so I guess the market is disappointed, hence no movement in the exchange rate.

I'm getting the hang of this
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