Help . . . Is The £ Going Into Free-fall?

[VegasVic]

Yes I agree, we've already had a series of bad numbers yesterday, in particular on manufacturing (didn't realize we had any manufacturing left but OK) and it was these that seem to have caused yesterdays fall and built an expectation of up to a 1.0% rate cut on Thursday. So, all things being equal, unless we see a rate cut in excess of 1.0%, and provided there is no more seriously bad news out of the UK this week, GBP/USD should continue to hover around its current support area - my guess is that we're due bad news out of the US, DJI maybe, that should help sustain the current GBP position or offset any further falls.

C.M., Listen to Lanna, he has been pretty much spot on so far in the Pound and Euros fall! I see the $1.40 threshold being tested by years end, I had envisioned the Pound droping something like this, but over a much longer period of time.

[JimsKnight]

This is bold stuff now. My faith in the pound is a bit wavering.

It was on the news recently today that the £ took its biggest drop against the $ since 1992!

I'm shorting about half of my living money to Thai Baht now.

Better now than if the £ really tanks.

The baht may be on shakey ground, but its somehow got higher powers over the £ which looks likely to fall further than the baht.

[chiang mai]

This is bold stuff now. My faith in the pound is a bit wavering.

It was on the news recently today that the £ took its biggest drop against the $ since 1992!

I'm shorting about half of my living money to Thai Baht now.

Better now than if the £ really tanks.

The baht may be on shakey ground, but its somehow got higher powers over the £ which looks likely to fall further than the baht.

I agree it's hard to try and keep the faith, I've got one years Baht on hand and a further two years Dollars in cash - might be time to tuck away the Sterling into its fixes and check on it again in two years time when UK rates could be pushing 15% or so.

[chiang mai]

Yes I agree, we've already had a series of bad numbers yesterday, in particular on manufacturing (didn't realize we had any manufacturing left but OK) and it was these that seem to have caused yesterdays fall and built an expectation of up to a 1.0% rate cut on Thursday. So, all things being equal, unless we see a rate cut in excess of 1.0%, and provided there is no more seriously bad news out of the UK this week, GBP/USD should continue to hover around its current support area - my guess is that we're due bad news out of the US, DJI maybe, that should help sustain the current GBP position or offset any further falls.

C.M., Listen to Lanna, he has been pretty much spot on so far in the Pound and Euros fall! I see the $1.40 threshold being tested by years end, I had envisioned the Pound droping something like this, but over a much longer period of time.

Vic I have the greatest admiration for LRB's trading insight and experience but I am sure he would be disappointed in my very novice skills if I acquiesced my views in favor of his or anyone else's. Having said that, the fact that LRB now supports BB's seemingly arbitrary view to some degree makes me think twice. As it happens I am not at risk financially in this matter since I am fully hedged - it's the damned principle though!

[lannarebirth]

Yes I agree, we've already had a series of bad numbers yesterday, in particular on manufacturing (didn't realize we had any manufacturing left but OK) and it was these that seem to have caused yesterdays fall and built an expectation of up to a 1.0% rate cut on Thursday. So, all things being equal, unless we see a rate cut in excess of 1.0%, and provided there is no more seriously bad news out of the UK this week, GBP/USD should continue to hover around its current support area - my guess is that we're due bad news out of the US, DJI maybe, that should help sustain the current GBP position or offset any further falls.

C.M., Listen to Lanna, he has been pretty much spot on so far in the Pound and Euros fall! I see the $1.40 threshold being tested by years end, I had envisioned the Pound droping something like this, but over a much longer period of time.

Vic I have the greatest admiration for LRB's trading insight and experience but I am sure he would be disappointed in my very novice skills if I acquiesced my views in favor of his or anyone else's. Having said that, the fact that LRB now supports BB's seemingly arbitrary view to some degree makes me think twice. As it happens I am not at risk financially in this matter since I am fully hedged - it's the damned principle though!

chiang mai,

I support no ones view but my own, and so should you(your own that is). The only question one needs to ask oneself is, "do I have the right view"? The 1.36 target is not arbitrary. It stems from it being the point of origination of the GBP's monthly rising wedge chart. Technical analysis suggests that rising wedges always return to their point of origination (at least). Nothing is cast in stone of course, but these things tend to resolve themselves as I've outlined.

I would never be so presumptuous as to tell people what they should do with their money, and I hope I insert enough disclaimers into any posts I make. As I've noted in the past, I only try to gve a view of "what is" and sometimes I'll add a little bit as to what "may happen".

[MJP]

Yes I agree, we've already had a series of bad numbers yesterday, in particular on manufacturing (didn't realize we had any manufacturing left but OK) and it was these that seem to have caused yesterdays fall and built an expectation of up to a 1.0% rate cut on Thursday. So, all things being equal, unless we see a rate cut in excess of 1.0%, and provided there is no more seriously bad news out of the UK this week, GBP/USD should continue to hover around its current support area - my guess is that we're due bad news out of the US, DJI maybe, that should help sustain the current GBP position or offset any further falls.

Thee's no difference between the DJI and the GBP. Both are the other side of the USD trade. Most eveything is. $1.36 is the target sugested by it's LT rising wedge. It will get there. Talk of parity and below is premature as there is no price action yet to suggest that outcome (only the speed and force ofthe current move). A break of 1.36 makes 1.00-1.05 the next target. Next 80 week cycle methinks.

BNP Paribas reckon final resistance at $1.27. JP Morgan $1.28. Probably March. JPM also reckon 92p to the Euro!

I just cannot see where any good news is going to come from in the UK. None. Reckon it will be a case of whose news is worse. UK is worst placed due to debt levels, imbalanced economy.

[churchill]

I agree the pound looks very weak , but both the dollar and therefore the Thai Baht look overvalued - Given the situation in Thailand is a devaluation possible ?

[chiang mai]

Yes I agree, we've already had a series of bad numbers yesterday, in particular on manufacturing (didn't realize we had any manufacturing left but OK) and it was these that seem to have caused yesterdays fall and built an expectation of up to a 1.0% rate cut on Thursday. So, all things being equal, unless we see a rate cut in excess of 1.0%, and provided there is no more seriously bad news out of the UK this week, GBP/USD should continue to hover around its current support area - my guess is that we're due bad news out of the US, DJI maybe, that should help sustain the current GBP position or offset any further falls.

Thee's no difference between the DJI and the GBP. Both are the other side of the USD trade. Most eveything is. $1.36 is the target sugested by it's LT rising wedge. It will get there. Talk of parity and below is premature as there is no price action yet to suggest that outcome (only the speed and force ofthe current move). A break of 1.36 makes 1.00-1.05 the next target. Next 80 week cycle methinks.

BNP Paribas reckon final resistance at $1.27. JP Morgan $1.28. Probably March. JPM also reckon 92p to the Euro!

I just cannot see where any good news is going to come from in the UK. None. Reckon it will be a case of whose news is worse. UK is worst placed due to debt levels, imbalanced economy.

The good news: The sales are on and things are getting cheaper, property prices are falling and may soon be sensible yet again and, it looks favorable for a white Xmas, what more can you ask for! As for the Thai side of things, at least the GBP/BAHT rate will, as has already been pointed out, keep the yobs and the mongers (fish perhaps?) at home, albeit in this neck of the woods they seem to have been replaced by ones from other countries who constantly say things like "floogen floogen flooge"!

Edited December 2, 2008 by chiang mai

[ArranP]

Its difficult to time the exact bottom for the pound, but is on the weak side currently. Therefore for me its about time to move dollar capital into the pound.

This capital I moved into the dollar when the pound was strong last june 2007 at 1.96.

I cannot time the tops and bottoms exactly but only work on the notion when it is strenthened move to weak and when its weakened move to strong.

Likewise, would look to move back again from pound to dollar when the dollar has weakened sufficiently...

I don't see this moving of capital on a daily or weekly basis but every 1, 2 or 3 years maybe more....

Edited December 2, 2008 by ArranP

[spiderman2]

However bad the British economy is, it is in a better state then the Italian, Spanish, Greek economies and many other smaller EU nations such as the Irish, Belgium and all East European nations whose currencies are pegged to the EU.

And we have control of our own currency and interest rates to turn it around, the Euro rates are set for the purpose of France and Germany alone.

[ArranP]

This morning a currency strategist on Bloomberg (a Mr Gallo if I remember correctly) , forecast the trough for the pound against the dollar during first qtr 2009, then 1.65 / 1.70 by end 2009.

Also forecast the Euro would weaken to 1.43 against the pound.

Edited December 2, 2008 by ArranP

[Mosha]

Thailand cuts interest rate, as business activity slows.

http://query.nytimes.com/gst/fullpage.html...752C1A9649C8B63

[Mosha]

Oops that is an old link. I searched after a half heard item on BBC Asia business report. Now they have repeated it,BBC is saying the cut is on the cards, and is expected at todays BOT meeting.

Edited December 2, 2008 by Mosha

[LaoPo]

Oops that is an old link. I searched after a half heard item on BBC Asia business report. Now they have repeated it,BBC is saying the cut is on the cards, and is expected at todays BOT meeting.

No problem...just 6 years old

But: maybe this helps ?

Rao Expects Thailand to Cut Rates 50 Basis Points Last Updated: December 2, 2008 20:32 EST (which is 3 Dec. in Thailand, 08.32AM time if I'm correct)

http://www.bloomberg.com/apps/news?pid=new...id=aJ1XA8kRiHxA

LaoPo

[Mosha]

I looked at my link and the first date I saw was 2nd Dec 2008. However, just listening again to BBC Business news Asia. An analyst said that the 50 base points was expected, and that the "danger" was they could be more drastic. Big cuts expected in 2009

[SomNamNah]

MIND THE GAP!

trendline approacheth. (drawn on close price - superimposed on candles)

make or break?

plunge protection squad on guard before the 14th december.

will then hold on to it and let it break below 8000 just in time for xmas?

or let it do the sensible thing and test 7447 again?

indicators at rock bottom... but then again, better to be safe than sorry.

It look to me like a lot of equities, fx ( gbp:usd etc) all have a little bit of downside left in them.... ie: lows not retested from the bear rally earlier.

I wonder if the market is gonna retest the whole lot and there is a BUFFER in place for the next bear raid of the DJI?

I dont feel like putting cash into the market yet hence im viewing the market with greedy bear eyes. I want more carnage!

Edited December 3, 2008 by SomNamNah

[Tafia]

With the uncertainty of a reasonable £ exchange, would UK expats be able to transfer via SWIFT US$ instead of £.

Wou;d that give them a better exchange over there?

[chiang mai]

MIND THE GAP!

trendline approacheth. (drawn on close price - superimposed on candles)

make or break?

plunge protection squad on guard before the 14th december.

will then hold on to it and let it break below 8000 just in time for xmas?

or let it do the sensible thing and test 7447 again?

indicators at rock bottom... but then again, better to be safe than sorry.

It look to me like a lot of equities, fx ( gbp:usd etc) all have a little bit of downside left in them.... ie: lows not retested from the bear rally earlier.

I wonder if the market is gonna retest the whole lot and there is a BUFFER in place for the next bear raid of the DJI?

I dont feel like putting cash into the market yet hence im viewing the market with greedy bear eyes. I want more carnage!

And the connection between the DJI and its direct relevance to the strength of Sterling (this thread) is?

[chiang mai]

With the uncertainty of a reasonable £ exchange, would UK expats be able to transfer via SWIFT US$ instead of £.

Wou;d that give them a better exchange over there?

The short answer is yes but really it depends on what rate you get when you trade GBP for USD. Change one Pound Sterling for Baht and you get x baht, trade one Pound Sterling for Dollars, Swift it to Thailand and then change it to Baht and you still get x, broadly speaking. But trade Sterling for Dollars now and wait for the value of Sterling to fall and you will still get the pre-fall rate for Baht using Dollars. Make sense?

[Mosha]

The BOT mulling 3 rate cut options.

http://www.bangkokpost.com/breaking_news/b...s.php?id=135145

[cclub75]

The BOT mulling 3 rate cut options.

http://www.bangkokpost.com/breaking_news/b...s.php?id=135145

I love those kind of totally nonsensical articles. "mulling 3 cut options" !

I can imagine the editor in chief at the Bangkok Post

-"Let's see : 0,25 or 0,50 or 0,75... yeah that sounds good buddy ! Okay start the presses, and print, you've got a hel_l of a scoop there ! This is pure juice buddy, it's going to rock."

[Mosha]

Well the decision is due in the next 15 minutes

[Tafia]

With the uncertainty of a reasonable £ exchange, would UK expats be able to transfer via SWIFT US$ instead of £.

Wou;d that give them a better exchange over there?

The short answer is yes but really it depends on what rate you get when you trade GBP for USD. Change one Pound Sterling for Baht and you get x baht, trade one Pound Sterling for Dollars, Swift it to Thailand and then change it to Baht and you still get x, broadly speaking. But trade Sterling for Dollars now and wait for the value of Sterling to fall and you will still get the pre-fall rate for Baht using Dollars. Make sense?

Yes.....a bit mish and mash really and if not transferring a large amount hardly worht the effort. thanks

[Mosha]

Did any one catch the rate cut figure, did I hear right 1%? Just now on BBC

Edit Yes 1 percentage point

http://www.bloomberg.com/apps/news?pid=206...&refer=home

Edited December 3, 2008 by Mosha

[chiang mai]

I didn't hear the rate cut news but instead saw the effect of the news on GBP and guessed as much, lead anchor describes it all best. Actually, the falls don't seem too dramatic at this stage, it's down to 1.4770 but nowhere as steep or as fast as it might be. Could be it's going to hold in range as I guessed earlier.

Edited December 3, 2008 by chiang mai

[churchill]

So Thailand cuts rates and the baht strenghtens , whilst the pound falls even before rates are announced in the UK ??

and I don't see how this would work , see under , surely all rates are interlinked , so how would one benefit by changing pounds to dollars and then transferring to Thailand ?

"QUOTE (Tafia @ 2008-12-03 11:17:46)

With the uncertainty of a reasonable £ exchange, would UK expats be able to transfer via SWIFT US$ instead of £.

Wou;d that give them a better exchange over there?

The short answer is yes but really it depends on what rate you get when you trade GBP for USD. Change one Pound Sterling for Baht and you get x baht, trade one Pound Sterling for Dollars, Swift it to Thailand and then change it to Baht and you still get x, broadly speaking. But trade Sterling for Dollars now and wait for the value of Sterling to fall and you will still get the pre-fall rate for Baht using Dollars. Make sense? "

[edwinchester]

I give up.

UK cuts it's interest rates and Sterling falls in value.

Thailand cuts it's interest rate and the Bht gains in value.

Someone please help me understand!

[MJP]

I give up.

UK cuts it's interest rates and Sterling falls in value.

Thailand cuts it's interest rate and the Bht gains in value.

Someone please help me understand!

From a FOREX mate,

Sterling's oversold unless the BOE go and make a monkey out of me and undercut their own gilts as well as their inflation targets is another way of looking at it.

'Course dumb people do dumb things and there's absolutely no stopping them. But I don't figure the MPC are that dumb, and if I had to take a call I'd figure that even 'though all the dumbness in the market at the moment has a greater volume than all the dumbness in the MPC, the MPC's dumbness still has more mass. I can count the stupidity in the MPC and feel its tug but I can see the dumbness in the market and it's big and hairy and scary and reminds me of something I can't quite place.

And there's a ferpectly simple 'splanation for this - people are punting on FX the way they once punted on the footy, junk bonds, dot coms, you know the drill. It's the new new and everybody who's anybody has got an angle and bait and a hook. Home team playing away says play GBP crosses (even though that's dumb) because even if you lose you understood why and if you happen win by accident instead everyone else gets it too (even after six pints or three bottles of Chardonnay for a tenner too many). Some folk aren't punting though, they win big and regular and talk places they shouldn't about what they did and why - then people see and blather a bit and want a piece and this is what sucks 'em right in.

And you know what that means - come the fourth, the market's going (I think anyway) to get sucked into the MPC's gravity-well of stupidity; Mohammed will move a little sure as baby camels get the hump (sometimes two) but the mountain's going to move far, far more.

Tears before bedtime, the dumb losers will get burnt and maybe double or quits, the dumb winners will double up anyway and sure as that camel the inside track (that's what it reminds me of) is the house'll win in the end.

CHFJPY is still a wonderous thing.

[MJP]

LONDON, Dec 3 (Reuters) - Britain's dominant services sector shrank in November at its fastest pace since the series began in 1996 as new business, employment and confidence fell at record rates, a survey showed on Wednesday.

Coming hard on the heels of grim manufacturing and construction data earlier this week, the report boosted expectations the Bank of England will slash interest rates by a full percentage point on Thursday, knocking the pound.

The Chartered Institute of Purchasing and Supply/Markit purchasing managers' index for the sector fell to 40.1 last month from 42.4 in October. That was below the consensus forecast of 41.2 and marked the seventh month below the growth threshold of 50.

"I think a combination of much weaker activity and some early hints at deflation will give the Bank of England confidence they can cut rates more aggressively," said Ross Walker at RBS.

The services sector spans businesses from cafes to banks, and makes up three quarters of British economic output. It has been in the front line of fire as a global shortage of capital has forced banks to rein in lending.

Britain's economy contracted in the third quarter for the first time since the recession of the early 1990s and surveys suggest the final three months of the year will be just as bad, if not worse.

http://www.reuters.com/article/marketsNews...255347120081203

[SomNamNah]

And the connection between the DJI and its direct relevance to the strength of Sterling (this thread) is?

I do beg your pardon Chiang Mai, no intention to offend.

the connection as i see it. If you would like to instruct me/others on charts, id be much obliged! (really) Have a few thousand trades on equities, and zero on FX.

Please tell me which currencies to plot against each other, im 100% cash and nervous.

Edited December 3, 2008 by SomNamNah