Re: Sterling in freefall again ?
 

Im no currency expert, and even though we live on the continent and it would be 'useful' for us personally to have the Euro in the UK, Im not sure that being in it would have helped us at all as a country. Over this last recession. Our debts are so high that being in the Euro could have broken some rules and we could have been in trouble. With Sterling we remain in control of our currency and not hand it totally over to the Brussels beaurocrats.

We just came back from a wonderful few days in Blighty, perfect weather in Kent walking, B+B in a country pub from 1690 and fry ups and curries ( I needed an England 'fix') Actually the exchange rate helped us - things are cheaper for the moment in the UK for us. Except for the pub prices.

Take a look at Australia their currency are at the strongest against the $dollar because of great growth prospects..... yet Japan after all the horrors it has had recently, has seen the Yen jump to the highest levels as well, and their growth prospects are under pressure of course. The G7 had to collectively sell billions (to who I wonder?) to bring the Yen down so that their exports could sell and the Government pumped cash onto the system as well. All to bring the rate down. I heard that if Portugal take a bailoout they will owe 130% of GDP. Theyve more than maxed out their 'credit card'. Very sad for the people, who arent the richest in Europe, but some of the nicest of all of us.

So FX trading is a tricky game.

However the UK have some strong plans and have not lost the credit ratings, whilst I suspect that Greece will default on their bailout, now Portugal and maybe Spain down the road, should mean that the Euro weakens. We are obligated to step in thanks to Darling so it will cost us, but surely all this euro weakness and sovereign debt must weaken the currency vs the pound.

But as in the Japan/Australia case above, nothing makes sense. If it did I'd be a rich man!!

Jon

Re: Sterling in freefall again ?
 

The reason for the jump in Yen was probably because the country has huge assets deposited throughout the world and it seems that because of the huge cost of rebuilding the infrastructure destroyed by the tsunami the markets believe that these funds will have to be repatriated.ie assets in other currencies liquidated and the currency sold for yen.So the currency markets are thinking ahead of the game.
As for the Euromany countries like Greece basically fiddled the books to gain entry and had no real hope of maintaining financial sobriety.The euro was and still is an accident waiting to happen.It will either break up because certain countries cannot live with the straightjacket that a one size fits all interest rate policy and(more importantly) exchange rate puts them in.Therefore the poor countries get poorer,and eventuall want to pull out.Or the German people get fed up with bailing the other countries out and turn off the taps.

Re: Sterling in freefall again ?
 

They are still in a mess, but conveniently for the government something happens in the world which is far more newsworthy for the media. :ohmy:

Re: Sterling in freefall again ?
 

Interesting about repatriating money that shot the Yen value up... however the thing I dont understand is that when it had risen and the G7 finance meeting was well telegraphed, in advance, it couldnt not have been a big surprise that they would react and bring the value down. Thats the reason for the meet.

So who would have bought with that pressure.....? I realise currencies are bought/sold in pairs, and trading is often very short term, but knowing that there were plans in place - who put long 'buy' orders on a falling currency? At that point I would not have touched the Yen. And Im no expert. I suppose those that shorted it made a packet. I guess I dont have the 'cohoneys' for that! But there must be a huge amount of Yen buyers that still have the currency. For every winner - there is a loser.

Greece lied about entry to the EU and having set that precedent, I suspect that they lied about entry into the Euro currency as well. No punishments - for the politicians - just a huge bailout! I remember Barosso 2 months before standing on the steps of the EU saying that he was confident that Greece would ride the storm and not need help! So much for that! I'm a capitalist - but I find it sad that the politicians and big business gained from this and now the people are taking the heat. At least they have the bailout. Lets hope these politicians know what to do with it!

As I said above all the signs are that over time the Euro will weaken and our pounds will get back to a better level. At least those people that bought at 1.4/1.5 will have some of their losses protected by the ex rate if they sell. However if the pound strengthens and the Spanish property prices dont, there are more potential losses for UK based owners. But once again when it comes to currencies - you never know.

Here in Brussels it is clear that there is no interest to drop or significantly change the Euro currency project. New countries continue to join the club! But I wonder how long Merkel will support it, its looking like political suicide for her and elections are not so far away! The German powerhouse, as you say, is supporting all this. Can you imagine the German people's reactions about the retirement age increase to 67... to pay for this ... and seeing the Greeks protesting about theirs rising to 62.... ouch!

Oh well all this currency and EU stuff..... its all Greek to me :confused::D

Soapbox over

Jon

PS Dont get me going over Libya :thumbdown:

Re: Sterling in freefall again ?
 

Eurozone CPI figure came in higher than than expected which reinforces
market opinion that ECB will raise rates at next weeks meeting.
Another reason why Stg is struggling against the Euro at moment.

Re: Sterling in freefall again ?
 

A very good reason for not being in it. Given the choice I suspect most Euroland countries would opt out given the choice.