kittycat1

Anyone know if exchange rates have dropped? could be a good time to send money home?

http://news.uk.msn.com/uk/britain-ge...rating-warning

Mogs

5.77 AED to 1.00 GBP as of this morning - no real change for the past couple of weeks.

http://www.xe.com/currencycharts/?fr...to=AED&view=1Y

wilsonc

They are, I think, scared of Greece leaving the Euro. If they do it may throw troubles into Spain, Italy and Portugal who all had there rating cut just now. These three countries would also be fighting a losing battle to stay within the Euro.

The fear is that if the Euro implodes the UK will suffer due to trade concerns with the EU. It is regarded a 30% chance of getting the rate cut in 18 months.

May start driving money into the dollar, away from the Euro again, which will help when sending money home!

The Dean

The credibility of the ratings agencies is now several degrees beloow zero. They are useless - go back and look at how they said the bundled-up dodgy mortgages ("sub-prime" as they became known) were AAA-rated.......

The Euro cannot survive - the trouble is, the Eurocrats have started to believe that Greece is the only problem... oh really? Kick them out then and everything will be fine.......

Meow

The Dean - this is more your field than mine, but any ideas as to what the financial cost would be of dismantling the Euro? Surely the cost of that is a deterrent bearing in mind so many countries are effectively broke already.



Kittycat1 - rates haven't moved today either. GBP 1 - AED 5.7779

typical

UBS has a strong point of view...

http://bruxelles.blogs.liberation.fr...20l%27euro.pdf

The Dean

Thanks for sharing that.......... I notice it was written five months ago, but if anything a break-up seems even more likely now than it did then.

The best line in that is the final one (p 17):

The only way to hedge against a Euro break-up scenario is to own no Euro
assets at all.

Quite.

Millhouse

I posted this one at the time. I do love this report. Civil war, maybe not ... civil unrest absolutely. It will be all across Europe by the end of the year.

As for the UK - anyone who thought we were not inline for a downgrade was/is naive. Probably why it didn't affect the exchange rate.

When Europe sorts out the mess, we are next in line in the bond markets.

UKCityGent

I disagree - the UK is put on a negative watch

There's a marked difference between entire downgrade, negative watch, and negative outlook. Negative outlook means a 30% chance of a downgrade (1 in 3), negative watch means a 50% chance of a downgrade.

The real question is how will the chancellor try to get out of the mess - spend or cut (deep cutting is bad and wrong on so many levels i wont start !!)

Millhouse

do you disagree that the UK is next to be chased in the bond markets? Given our massive debt overhang, sluggish economy and the collapse of one of our largest trading partners (EU block).?

UKCityGent

the 6mth-5yr yield curve is flat and has been for a while, CDS have been tight range and the 10yr spread widens to 98bp. The main things that can really push this would be the soveign funds and hedge funds if the bond breaches their risk limits - however you will have the demand eaten by the insurance companies especially during a correction. Just my tuppence

The Dean

Yes I disagree................ when the US got downgraded last August, the market started buying US Treasuries....... Austrian bonds have been popular lately............ there's no longer a direct link in any of these markets..........

seven seas

So how does that happen exactly? Has no. 9 received a giant envelope from Experian?

Victor Meldrew

I thought the Dirham was tied up with/similar to the Dollar. If the Dollar (therefore Dirham) is strong and the Euro (therefore Pound) weak then surely this is a bad time to send money home as the exchange rate Dirham to Pound will go up?

The Dean

Weak currencies are cheap to buy. When the GBP/AED is, say, 5.75, it's a better time to send money to the UK than when the rate is, say, 6.50. The rate is calculated by multiplying the GBP/USD by the (pegged) USD/AED.