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

[chiang mai]

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.

Wht may i ask was the relevance of your post? - other than 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.

Intention is to keep the thread focused and on track, nothing offensive about that - read back through the thread and you'll say that every now and again someone comes along that wants to talk about US Dollars and then the US economy and then the US elections, this thread is not about those things.

[chiang mai]

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? "

If you look at USD/BAHT currently it has been climbing slowly over recent weeks whilst GBP/BAHT has been falling - GBP has been falling against USD also. Therefore, change GBP for USD now and when GBP/USD next falls you can use USD to buy BAHT at the higher rate.

[chiang mai]

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!

The link is between GBP and USD to THB NOT from GBP directly to THB. What you are seeing is the fall in value of GBP against USD following todays rate cut by the BOE - this in turn caused a drop by GBP against THB. The fact that there was a BOT rate cut at the same time is largely irrelevant. Having said that offshore GBP/THB is still showing a respectable 53.38 right now.

[SomNamNah]

Fair enough Chiang Mai, thanks...

looks to me like the DJ/SP and USD dictate what Sterling does? happy to be instructed otherwise...

Please tell me which charts give the best indicators of the movements..., as ive said ive only ever done stock charts, and programming on equities...you sound very knowledgable, please share!

Have a great night.

Edited December 3, 2008 by SomNamNah

[JimmyGreaves]

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? "

If you look at USD/BAHT currently it has been climbing slowly over recent weeks whilst GBP/BAHT has been falling - GBP has been falling against USD also. Therefore, change GBP for USD now and when GBP/USD next falls you can use USD to buy BAHT at the higher rate.

Maybe GBP rises against the USD from here on and you are caught!

[Mosha]

As Corporal Jones would say on Dad's Army. Don't panic Mr. Mainwaring. Last week on BBC News Asia, they were forecasting a USD crash in the first or second quater next year. Thailand according to the BOT will have it's worst year since the Asian economic crisis in 97 was it. Even worse if PAD do as threatened and blockade the ports.

[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? "

If you look at USD/BAHT currently it has been climbing slowly over recent weeks whilst GBP/BAHT has been falling - GBP has been falling against USD also. Therefore, change GBP for USD now and when GBP/USD next falls you can use USD to buy BAHT at the higher rate.

You say " when gdp/usd next falls" - How do you know that is going to happen . Many people are saying the $ is overvalued now and may crash at any time - i would not want to be holding $ for the next month or so - to make a small gain in exchange rates - i think very risky , and costing you bank charges etc before you even begin to gain .

Edited December 3, 2008 by churchill

[chiang mai]

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? "

If you look at USD/BAHT currently it has been climbing slowly over recent weeks whilst GBP/BAHT has been falling - GBP has been falling against USD also. Therefore, change GBP for USD now and when GBP/USD next falls you can use USD to buy BAHT at the higher rate.

You say " when gdp/usd next falls" - How do you know that is going to happen . Many people are saying the $ is overvalued now and may crash at any time - i would not want to be holding $ for the next month or so - to make a small gain in exchange rates - i think very risky , and costing you bank charges etc before you even begin to gain .

If you read back through the many posts in this thread, that is exactly what has been discussed hence the title of thread, "is the £ going into free fall". When GBP/USD was at 2.08 most folks new that it was overvalued so for holders of GBP to sell Sterling and buy USD is what many people advocated, myself included - for those that made the exchange at that level the proposition was highly profitable both in terms of BAHT and GBP. At 1.50 (ish) which is where it is now there is a question in the minds of some folks whether it will continue to fall, remain static or rebound. The chartists in this group believe strongly it will continue to fall and that 1.35 is likely - there are even those who think that 1.0 is likely. So, you need to take a view and if you decide it's too late/risky right now then you should do nothing. But if you think it makes sense to hedge GBP for USD .....

[chiang mai]

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? "

If you look at USD/BAHT currently it has been climbing slowly over recent weeks whilst GBP/BAHT has been falling - GBP has been falling against USD also. Therefore, change GBP for USD now and when GBP/USD next falls you can use USD to buy BAHT at the higher rate.

Maybe GBP rises against the USD from here on and you are caught!

Yup, maybe! But there again, maybe pigs can fly!!

[chiang mai]

Fair enough Chiang Mai, thanks...

looks to me like the DJ/SP and USD dictate what Sterling does? happy to be instructed otherwise...

Please tell me which charts give the best indicators of the movements..., as ive said ive only ever done stock charts, and programming on equities...you sound very knowledgable, please share!

Have a great night.

I'm not a chartist nor a technical analyst but I know a man who is - queue LRB

[chiang mai]

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.

That's really interesting that he sees that because I sense the same thing also from talking to a range of people and from reading threads here on TV. All of a sudden the worlds population has become part time FOREX traders - not a bad thing in some respects I suppose because it means that people are becoming more aware - the downside of course is that part-time and ameateur traders can do both a lot of damage and lose a lot of money. On the former point, hoards of folks climbing on the shorting bandwagon compounds a problem that is already difficult to manage - e.g Citi Group, RBS, A&L and yes, Sterling!

[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.

That's really interesting that he sees that because I sense the same thing also from talking to a range of people and from reading threads here on TV. All of a sudden the worlds population has become part time FOREX traders - not a bad thing in some respects I suppose because it means that people are becoming more aware - the downside of course is that part-time and ameateur traders can do both a lot of damage and lose a lot of money. On the former point, hoards of folks climbing on the shorting bandwagon compounds a problem that is already difficult to manage - e.g Citi Group, RBS, A&L and yes, Sterling!

I think he's actually talking about major institutions.

[VegasVic]

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.

That's really interesting that he sees that because I sense the same thing also from talking to a range of people and from reading threads here on TV. All of a sudden the worlds population has become part time FOREX traders - not a bad thing in some respects I suppose because it means that people are becoming more aware - the downside of course is that part-time and ameateur traders can do both a lot of damage and lose a lot of money. On the former point, hoards of folks climbing on the shorting bandwagon compounds a problem that is already difficult to manage - e.g Citi Group, RBS, A&L and yes, Sterling!

The part time FOREX players are small timers and in the long run they will get burnt, however to think that Sterling is oversold and will bounce back anytime soon will also get you burnt. Sterling will not return until there is some catalyst to help it to make a comeback, the BOE rate cut tomorrow certainly will not be helping Sterling in the short run. Does Sterling remain at or near these levles for a couple of years? It is certainly a possibility, given the dire economic straights that the U.K. is facing

[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.

That's really interesting that he sees that because I sense the same thing also from talking to a range of people and from reading threads here on TV. All of a sudden the worlds population has become part time FOREX traders - not a bad thing in some respects I suppose because it means that people are becoming more aware - the downside of course is that part-time and ameateur traders can do both a lot of damage and lose a lot of money. On the former point, hoards of folks climbing on the shorting bandwagon compounds a problem that is already difficult to manage - e.g Citi Group, RBS, A&L and yes, Sterling!

The part time FOREX players are small timers and in the long run they will get burnt, however to think that Sterling is oversold and will bounce back anytime soon will also get you burnt. Sterling will not return until there is some catalyst to help it to make a comeback, the BOE rate cut tomorrow certainly will not be helping Sterling in the short run. Does Sterling remain at or near these levles for a couple of years? It is certainly a possibility, given the dire economic straights that the U.K. is facing

Hi Vic,

I tend to agree. I'm here in the UK right now and let me tell you, it's bad and it's getting worse by the day.

However, where countries or regions used to have recessions in relative isolation this time it's big (depression) and global (however I believe it started in the UK and not the US contrary to Politburo Chief Brown's rhetoric).

Today we see the first bailout money for the big three. They couldn't make it work during a boom, how the hel_l are they going to make it work now. $36Bn will become a monthly standing order directly from the printing presses of the Fed.

So at some point USD's going to break. And break big.

Six months? A year? But bust out it will.

UK's still finished as a first world country mind.

[Mosha]

It sounds like another big cut is likely from the BOE

http://news.uk.msn.com/Article.aspx?cp-documentid=11579365

[ArranP]

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.

That's really interesting that he sees that because I sense the same thing also from talking to a range of people and from reading threads here on TV. All of a sudden the worlds population has become part time FOREX traders - not a bad thing in some respects I suppose because it means that people are becoming more aware - the downside of course is that part-time and ameateur traders can do both a lot of damage and lose a lot of money. On the former point, hoards of folks climbing on the shorting bandwagon compounds a problem that is already difficult to manage - e.g Citi Group, RBS, A&L and yes, Sterling!

The part time FOREX players are small timers and in the long run they will get burnt, however to think that Sterling is oversold and will bounce back anytime soon will also get you burnt. Sterling will not return until there is some catalyst to help it to make a comeback, the BOE rate cut tomorrow certainly will not be helping Sterling in the short run. Does Sterling remain at or near these levles for a couple of years? It is certainly a possibility, given the dire economic straights that the U.K. is facing

Most currency strategists on bloomberg are forcasting a recovery in sterling against the dollar next year from about march onwards.

I believe their reasoning behind this is not directly due to the marco or monetory policy of either U.S and U.K, but due movement of money caused by the de-leveraging story which they seem to attribute the major part of the USD/GBP movement seen upto last month (also seen in the JPY).

Moving forward the reversing of this ie. re-establishing positions in equities which necitates in part out-flows from the dollar (and JPY).

What are your thoughts on the effect of this de-leveraging and predicted out-flows from USD to re-establish equity positions next year ?

Edited December 4, 2008 by ArranP

[whatawonderfulday]

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.

That's really interesting that he sees that because I sense the same thing also from talking to a range of people and from reading threads here on TV. All of a sudden the worlds population has become part time FOREX traders - not a bad thing in some respects I suppose because it means that people are becoming more aware - the downside of course is that part-time and ameateur traders can do both a lot of damage and lose a lot of money. On the former point, hoards of folks climbing on the shorting bandwagon compounds a problem that is already difficult to manage - e.g Citi Group, RBS, A&L and yes, Sterling!

The part time FOREX players are small timers and in the long run they will get burnt, however to think that Sterling is oversold and will bounce back anytime soon will also get you burnt. Sterling will not return until there is some catalyst to help it to make a comeback, the BOE rate cut tomorrow certainly will not be helping Sterling in the short run. Does Sterling remain at or near these levles for a couple of years? It is certainly a possibility, given the dire economic straights that the U.K. is facing

Most currency strategists on bloomberg are forcasting a recovery in sterling against the dollar next year from about march onwards.

I believe their reasoning behind this is not directly due to the marco or monetory policy of either U.S and U.K, but due to the end of de-leveraging story which they attribute alot of the USD/GBP movement seen thus far (also seen in the JPY), then moving forward the reversing of this ie. re-establishing positions in equities which necitates out-flows from the dollar (and JPY).

What are your thoughts about this de-leveraging ?

These wouldn't happen to be the very same strategists that couldn't see what was in front of their noses 1 year to 18 months ago would it ?

[chiang mai]

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.

That's really interesting that he sees that because I sense the same thing also from talking to a range of people and from reading threads here on TV. All of a sudden the worlds population has become part time FOREX traders - not a bad thing in some respects I suppose because it means that people are becoming more aware - the downside of course is that part-time and ameateur traders can do both a lot of damage and lose a lot of money. On the former point, hoards of folks climbing on the shorting bandwagon compounds a problem that is already difficult to manage - e.g Citi Group, RBS, A&L and yes, Sterling!

The part time FOREX players are small timers and in the long run they will get burnt, however to think that Sterling is oversold and will bounce back anytime soon will also get you burnt. Sterling will not return until there is some catalyst to help it to make a comeback, the BOE rate cut tomorrow certainly will not be helping Sterling in the short run. Does Sterling remain at or near these levles for a couple of years? It is certainly a possibility, given the dire economic straights that the U.K. is facing

Most currency strategists on bloomberg are forcasting a recovery in sterling against the dollar next year from about march onwards.

I believe their reasoning behind this is not directly due to the marco or monetory policy of either U.S and U.K, but due movement of money caused by the de-leveraging story which they seem to attribute the major part of the USD/GBP movement seen upto last month (also seen in the JPY).

Moving forward the reversing of this ie. re-establishing positions in equities which necitates in part out-flows from the dollar (and JPY).

What are your thoughts on the effect of this de-leveraging and predicted out-flows from USD to re-establish equity positions next year ?

I'm very much in the minority here when I suggest that Sterling has nearly reached bottom and I'm truly doubtful it will go below 1.40 - this last rate cut has reinforced my view that exchange rate movement isn't have such a huge effect as it might. I therefore think we will see a resurgence in Sterling but sooner rather than later but only in part for the reasons you have mentioned. The majority reason for any increase in Sterling will result from Dollar weakness and that will occur as interest rates approach zero and investors seek out opportunities other than bank instruments.

[churchill]

I agree - The BOE will be doing something positive to help the economy , as the US

is doing , So sterling may strengthen against the euro .I also see both the dollar and baht as overvalued and both or one may fall which will help pound/baht , probably early next year . IMO

[lannarebirth]

I agree - The BOE will be doing something positive to help the economy , as the US

is doing , So sterling may strengthen against the euro .I also see both the dollar and baht as overvalued and both or one may fall which will help pound/baht , probably early next year . IMO

The most important precondition for a currency to rise, is that it must stop falling first. Correct me please if I am wrong, but I believe the GBP has made a new cyclical low today.

[churchill]

Yes but I don't believe the pound is going to nothing yet ! so at some stage , which I believe to be sooner rather than later it will have reached its bottom ( we are talking about the next few months ) and probably rise against curencies , such as the dolar / baht that are reletavely highly valued at present .

[stament]

I agree - The BOE will be doing something positive to help the economy , as the US

is doing , So sterling may strengthen against the euro .I also see both the dollar and baht as overvalued and both or one may fall which will help pound/baht , probably early next year . IMO

The BoE is doing something you're right lowering interest rates to stimulate the economy. However, this has an adverse effect on the £ in the short-term at least because investors are getting a poor return for their savings they will pull out and invest elsewhere, hence the pound will fall against other currencies.

Luckily, Thailand also cut interest rates by 1% this week otherwise STG would be even lower against the THB as BoE cut was widely anticipated so already markets had built into the forward rate.

[chiang mai]

I agree - The BOE will be doing something positive to help the economy , as the US

is doing , So sterling may strengthen against the euro .I also see both the dollar and baht as overvalued and both or one may fall which will help pound/baht , probably early next year . IMO

The most important precondition for a currency to rise, is that it must stop falling first.

We were never the ones to let a few simple facts get in the way of our firmly held beliefs.

[MJP]

I agree - The BOE will be doing something positive to help the economy , as the US

is doing , So sterling may strengthen against the euro .I also see both the dollar and baht as overvalued and both or one may fall which will help pound/baht , probably early next year . IMO

The most important precondition for a currency to rise, is that it must stop falling first.

We were never the ones to let a few simple facts get in the way of our firmly held beliefs.

Lot's of Sterling chat here,

http://www.housepricecrash.co.uk/forum/ind...hp?showforum=22

[MJP]

Pimco Sees Pound Bottom as BOE Cuts Rate to 1951 Low (Update1)

Email | Print | A A A

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

By Lukanyo Mnyanda and Ye Xie

Dec. 5 (Bloomberg) -- The Bank of England’s third interest- rate cut since the start of October is raising speculation that the pound’s 26 percent slide may be coming to an end.

Pacific Investment Management Co., which said as recently as September the pound was “overvalued,” and Millennium Asset Management have exited or cut bets the currency will weaken. The pound traded in a range of about $1.47 and $1.55 the past month, after dropping from $2 in July.

“If you were shorting the pound, now is the time to reduce those positions,” said Myles Bradshaw, a money manager in London at Pimco, manager of the world’s largest bond fund. “The arguments to be underweight are not as strong anymore.”

Bank of England Governor Mervyn King cut the nation’s key rate to 2 percent yesterday, the lowest level since Winston Churchill was prime minister in 1951, to help bolster an economy on the brink of a recession. The rate is down from 5 percent as recently as Oct. 7.

After the decision, the currency rebounded to as high as $1.4815 per dollar from $1.4471. It was at 86.79 pence per euro as of 9:40 a.m. in London today, after dropping to a record low of 87.26 pence yesterday. The pound may gain 2 percent against the dollar by April, according to the median forecast of 45 analysts and strategists surveyed by Bloomberg.

Even with today’s gains the pound is poised for its worst year since 1972, as a collapse in bank lending worldwide dried up credit to companies and consumers. It’s down 15 percent versus the euro.../

[chiang mai]

Pimco Sees Pound Bottom as BOE Cuts Rate to 1951 Low (Update1)

Email | Print | A A A

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

By Lukanyo Mnyanda and Ye Xie

Dec. 5 (Bloomberg) -- The Bank of England’s third interest- rate cut since the start of October is raising speculation that the pound’s 26 percent slide may be coming to an end.

Pacific Investment Management Co., which said as recently as September the pound was “overvalued,” and Millennium Asset Management have exited or cut bets the currency will weaken. The pound traded in a range of about $1.47 and $1.55 the past month, after dropping from $2 in July.

“If you were shorting the pound, now is the time to reduce those positions,” said Myles Bradshaw, a money manager in London at Pimco, manager of the world’s largest bond fund. “The arguments to be underweight are not as strong anymore.”

Bank of England Governor Mervyn King cut the nation’s key rate to 2 percent yesterday, the lowest level since Winston Churchill was prime minister in 1951, to help bolster an economy on the brink of a recession. The rate is down from 5 percent as recently as Oct. 7.

After the decision, the currency rebounded to as high as $1.4815 per dollar from $1.4471. It was at 86.79 pence per euro as of 9:40 a.m. in London today, after dropping to a record low of 87.26 pence yesterday. The pound may gain 2 percent against the dollar by April, according to the median forecast of 45 analysts and strategists surveyed by Bloomberg.

Even with today’s gains the pound is poised for its worst year since 1972, as a collapse in bank lending worldwide dried up credit to companies and consumers. It’s down 15 percent versus the euro.../

Never heard of PIM before but can't say I disagree, GBP seems comfortable around 1.47, bottom can't be far away, yours, mine, somebody's! BTW, checked out your site UK reference, lots of good info to be had there but what a miserable bunch of people, everyone seems sooooo unhappy, discontent and despondency abounds.

[MJP]

Pimco Sees Pound Bottom as BOE Cuts Rate to 1951 Low (Update1)

Email | Print | A A A

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

By Lukanyo Mnyanda and Ye Xie

Dec. 5 (Bloomberg) -- The Bank of England's third interest- rate cut since the start of October is raising speculation that the pound's 26 percent slide may be coming to an end.

Pacific Investment Management Co., which said as recently as September the pound was "overvalued," and Millennium Asset Management have exited or cut bets the currency will weaken. The pound traded in a range of about $1.47 and $1.55 the past month, after dropping from $2 in July.

"If you were shorting the pound, now is the time to reduce those positions," said Myles Bradshaw, a money manager in London at Pimco, manager of the world's largest bond fund. "The arguments to be underweight are not as strong anymore."

Bank of England Governor Mervyn King cut the nation's key rate to 2 percent yesterday, the lowest level since Winston Churchill was prime minister in 1951, to help bolster an economy on the brink of a recession. The rate is down from 5 percent as recently as Oct. 7.

After the decision, the currency rebounded to as high as $1.4815 per dollar from $1.4471. It was at 86.79 pence per euro as of 9:40 a.m. in London today, after dropping to a record low of 87.26 pence yesterday. The pound may gain 2 percent against the dollar by April, according to the median forecast of 45 analysts and strategists surveyed by Bloomberg.

Even with today's gains the pound is poised for its worst year since 1972, as a collapse in bank lending worldwide dried up credit to companies and consumers. It's down 15 percent versus the euro.../

Never heard of PIM before but can't say I disagree, GBP seems comfortable around 1.47, bottom can't be far away, yours, mine, somebody's! BTW, checked out your site UK reference, lots of good info to be had there but what a miserable bunch of people, everyone seems sooooo unhappy, discontent and despondency abounds.

Oh dear god yes. I'm one of the only happy ones (Mr Parry). A mate of mine (DissipatedYouthIsValuable) is a good crack too, he's a GP who couldn't care a monkeys. There's a few others, mainly City boys and a strange number of Doctors?

I've tried telling them they're all miserable sods and should seek help, but they won't have it!

[MJP]

Chiang Mai,

Regards HPC, I've told them CHEER UP!

http://www.housepricecrash.co.uk/forum/ind...showtopic=97161

[Naam]

I agree - The BOE will be doing something positive to help the economy , as the US

is doing , So sterling may strengthen against the euro .I also see both the dollar and baht as overvalued and both or one may fall which will help pound/baht , probably early next year . IMO

The most important precondition for a currency to rise, is that it must stop falling first.

We were never the ones to let a few simple facts get in the way of our firmly held beliefs.

Lot's of Sterling chat here,

http://www.housepricecrash.co.uk/forum/ind...hp?showforum=22

i wonder what kind of people would be interested in Sterling

[Marvo]

i wonder what kind of people would be interested in Sterling

ANS. Those living on a sinking island, who want to take what's left of their cash with them when they jump ship