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

[VegasVic]

Essentially living in one place and depending on currency from another (exchange rates) is a dangerous situation.

Wherever it may be in the world.

There certainly seems to be an influx of foreigners coming to live here since the exchange rates favoured them (post 1997). I hope they weren't depending on that.

If we are going back to the old days of 45Bt to the pound they might be in for a rough ride.

From my perspective it's a question of knowing at what exchange rate Thailand cease to be good value. Certainly it is so at 75, 70 and 65 but at 60, 55 and 50 it becomes marginal. At anything below 50 it probably is not.

Should the Dollar gravitate back to the "average level" vs. the baht since 1997 which is in the 41-43 range and the pound drop to $1.50 vs. the geenback then you will still enjoy an exchange rate in the 61-65 range. Thats my best guess on how things will play out

[PCA]

Given that USD is way oversold and significant resistance exists at 1.80 and 1.75 I would guess that the current rally is going to run out of steam in the not too distant future, the question then becomes, where and what next. There's an argument in favour of getting out of USD at some point between those two resistance levels and moving into EUR for a couple of reasons. One reason is that whilst EUR/USD has been falling there is a multi-year trendline approaching which could reverse the trend. Secondly, given their respective interest rate strategies there must be a strong potential for the EUR to achieve new highs against USD in the short/medium term. Does anyone else see that potential?

CM, I realize that you meant that the Dollar was way overbought (short term), but what you seem to fail to realize is that the Dollar was way way oversold for the past 6-7 years. As far as that resisitance level for the pound at $1.75 or the Euro at $1.45 so often refered to here, apparently the worldwide FOREX traders were not made aware of those resistance levels because it looks like the pound will be trading in the $1.72's before the day is out and the Euro is looking to go below $1.43. There certainly could be some short term "dead cat bounce" for the EURO and the Pound, but the longer term trend for both curencies is down vs. the Dollar. A weakening Pound and EURO may very well be the saving grace for many European economies that are headed for some very tough times over the next 12-18 months, as unemployment rises throughout Europe at least the weakening currencies will bolster employment in the export sector.

Speaking technical, none of your price levels have/had any relevance. Neither is there resistance nor is or was there trend violation. The pounds uptrend was already broken around 1.92 while the Euro's uptrend is not even tested. Beyond that a broken trend doesnt mean an immediate reversal. But I know you Americans are fast with the gun

[VegasVic]

Given that USD is way oversold and significant resistance exists at 1.80 and 1.75 I would guess that the current rally is going to run out of steam in the not too distant future, the question then becomes, where and what next. There's an argument in favour of getting out of USD at some point between those two resistance levels and moving into EUR for a couple of reasons. One reason is that whilst EUR/USD has been falling there is a multi-year trendline approaching which could reverse the trend. Secondly, given their respective interest rate strategies there must be a strong potential for the EUR to achieve new highs against USD in the short/medium term. Does anyone else see that potential?

CM, I realize that you meant that the Dollar was way overbought (short term), but what you seem to fail to realize is that the Dollar was way way oversold for the past 6-7 years. As far as that resisitance level for the pound at $1.75 or the Euro at $1.45 so often refered to here, apparently the worldwide FOREX traders were not made aware of those resistance levels because it looks like the pound will be trading in the $1.72's before the day is out and the Euro is looking to go below $1.43. There certainly could be some short term "dead cat bounce" for the EURO and the Pound, but the longer term trend for both curencies is down vs. the Dollar. A weakening Pound and EURO may very well be the saving grace for many European economies that are headed for some very tough times over the next 12-18 months, as unemployment rises throughout Europe at least the weakening currencies will bolster employment in the export sector.

Speaking technical, none of your price levels have/had any relevance. Neither is there resistance nor is or was there trend violation. The pounds uptrend was already broken around 1.92 while the Euro's uptrend is not even tested. Beyond that a broken trend doesnt mean an immediate reversal. But I know you Americans are fast with the gun

Thats right pardner we yanks are always packing iron and are quick on the draw, especially those of us in the wild west, in my part of the woods they call me Sedona slim You T/A guys are always good for a laugh I tell you what pard, 6 months from now if the Euro is back at $1.60 and the pound is back at $2.10 then feel free to throw all that T/A mumbo jumbo around and tell me how wrong I was, but for now weather you like it or not I have been spot on! Go back and check some of my posts from a few months ago and you will see that time and time again I was shouting from the rooftops to short oil in the upper $130's, short gold at $1000 and go long the dollar . If you go back a year ago you can see that I was predicting that the Shanghai composite would take a 50% haircut at some point before the Olympics, now I must admit that I was a little off on that one as the Shanghai composite actually lost 60% of its value before the Olympics I know that you technicians work awfully hard on those charts of yours, but sometimes you just need to throw the charts out of the window and this is one of those times. I am going to go out on a limb right here and now and predict that the Euro will see $1.35 vs. the Dollar before years end and the Pound will be very fortunate if it remains even a fraction above $1.70. As we enter 2009 look for the FED to begin increasing rates and look for the EU central bankers and the BOE to begin lowering rates as there backs will be to the wall. Now this might not all be in sync with your T/A, but trust me when I tell you that this is one of those times when T/A is next to useless (If you don't believe me then just look at all the hedge funds going belly up with all of their mathmaticians, arbitragers and Technical Analysts now on the unemployment lines).

[Naam]

VegasVic after the chartlatanists applied their voodoo

[VegasVic]

VegasVic after the chartlatanists applied their voodoo

Ouch! That one in the forehead looks painful I just hope PCA is not Hatiian by birth

[PCA]

Given that USD is way oversold and significant resistance exists at 1.80 and 1.75 I would guess that the current rally is going to run out of steam in the not too distant future, the question then becomes, where and what next. There's an argument in favour of getting out of USD at some point between those two resistance levels and moving into EUR for a couple of reasons. One reason is that whilst EUR/USD has been falling there is a multi-year trendline approaching which could reverse the trend. Secondly, given their respective interest rate strategies there must be a strong potential for the EUR to achieve new highs against USD in the short/medium term. Does anyone else see that potential?

CM, I realize that you meant that the Dollar was way overbought (short term), but what you seem to fail to realize is that the Dollar was way way oversold for the past 6-7 years. As far as that resisitance level for the pound at $1.75 or the Euro at $1.45 so often refered to here, apparently the worldwide FOREX traders were not made aware of those resistance levels because it looks like the pound will be trading in the $1.72's before the day is out and the Euro is looking to go below $1.43. There certainly could be some short term "dead cat bounce" for the EURO and the Pound, but the longer term trend for both curencies is down vs. the Dollar. A weakening Pound and EURO may very well be the saving grace for many European economies that are headed for some very tough times over the next 12-18 months, as unemployment rises throughout Europe at least the weakening currencies will bolster employment in the export sector.

Speaking technical, none of your price levels have/had any relevance. Neither is there resistance nor is or was there trend violation. The pounds uptrend was already broken around 1.92 while the Euro's uptrend is not even tested. Beyond that a broken trend doesnt mean an immediate reversal. But I know you Americans are fast with the gun

Thats right pardner we yanks are always packing iron and are quick on the draw, especially those of us in the wild west, in my part of the woods they call me Sedona slim You T/A guys are always good for a laugh I tell you what pard, 6 months from now if the Euro is back at $1.60 and the pound is back at $2.10 then feel free to throw all that T/A mumbo jumbo around and tell me how wrong I was, but for now weather you like it or not I have been spot on! Go back and check some of my posts from a few months ago and you will see that time and time again I was shouting from the rooftops to short oil in the upper $130's, short gold at $1000 and go long the dollar . If you go back a year ago you can see that I was predicting that the Shanghai composite would take a 50% haircut at some point before the Olympics, now I must admit that I was a little off on that one as the Shanghai composite actually lost 60% of its value before the Olympics I know that you technicians work awfully hard on those charts of yours, but sometimes you just need to throw the charts out of the window and this is one of those times. I am going to go out on a limb right here and now and predict that the Euro will see $1.35 vs. the Dollar before years end and the Pound will be very fortunate if it remains even a fraction above $1.70. As we enter 2009 look for the FED to begin increasing rates and look for the EU central bankers and the BOE to begin lowering rates as there backs will be to the wall. Now this might not all be in sync with your T/A, but trust me when I tell you that this is one of those times when T/A is next to useless (If you don't believe me then just look at all the hedge funds going belly up with all of their mathmaticians, arbitragers and Technical Analysts now on the unemployment lines).

you know buddy, I have nothing against your views and often smile about how you interprete things. Nevertheless we chartists make the dosh and I am not talking about T/A here in case you dont know the difference. Not a single prediction I make. Other subject now - when you saw all coming of course the dollar collapse was no secret to you and since you advise the brits to get out of their pounds now did you turn your back to the dollar when its decline was obvious? You talk about bubbles in the stock market oil and gold. Thats an old chewing gum. I dont mind if your currency predictions work out but in case they will dont get more confident than you already are as this will break your balls one day.

[chiang mai]

Given that USD is way oversold and significant resistance exists at 1.80 and 1.75 I would guess that the current rally is going to run out of steam in the not too distant future, the question then becomes, where and what next. There's an argument in favour of getting out of USD at some point between those two resistance levels and moving into EUR for a couple of reasons. One reason is that whilst EUR/USD has been falling there is a multi-year trendline approaching which could reverse the trend. Secondly, given their respective interest rate strategies there must be a strong potential for the EUR to achieve new highs against USD in the short/medium term. Does anyone else see that potential?

CM, I realize that you meant that the Dollar was way overbought (short term), but what you seem to fail to realize is that the Dollar was way way oversold for the past 6-7 years. As far as that resisitance level for the pound at $1.75 or the Euro at $1.45 so often refered to here, apparently the worldwide FOREX traders were not made aware of those resistance levels because it looks like the pound will be trading in the $1.72's before the day is out and the Euro is looking to go below $1.43. There certainly could be some short term "dead cat bounce" for the EURO and the Pound, but the longer term trend for both curencies is down vs. the Dollar. A weakening Pound and EURO may very well be the saving grace for many European economies that are headed for some very tough times over the next 12-18 months, as unemployment rises throughout Europe at least the weakening currencies will bolster employment in the export sector.

Speaking technical, none of your price levels have/had any relevance. Neither is there resistance nor is or was there trend violation. The pounds uptrend was already broken around 1.92 while the Euro's uptrend is not even tested. Beyond that a broken trend doesnt mean an immediate reversal. But I know you Americans are fast with the gun

Thats right pardner we yanks are always packing iron and are quick on the draw, especially those of us in the wild west, in my part of the woods they call me Sedona slim You T/A guys are always good for a laugh I tell you what pard, 6 months from now if the Euro is back at $1.60 and the pound is back at $2.10 then feel free to throw all that T/A mumbo jumbo around and tell me how wrong I was, but for now weather you like it or not I have been spot on! Go back and check some of my posts from a few months ago and you will see that time and time again I was shouting from the rooftops to short oil in the upper $130's, short gold at $1000 and go long the dollar . If you go back a year ago you can see that I was predicting that the Shanghai composite would take a 50% haircut at some point before the Olympics, now I must admit that I was a little off on that one as the Shanghai composite actually lost 60% of its value before the Olympics I know that you technicians work awfully hard on those charts of yours, but sometimes you just need to throw the charts out of the window and this is one of those times. I am going to go out on a limb right here and now and predict that the Euro will see $1.35 vs. the Dollar before years end and the Pound will be very fortunate if it remains even a fraction above $1.70. As we enter 2009 look for the FED to begin increasing rates and look for the EU central bankers and the BOE to begin lowering rates as there backs will be to the wall. Now this might not all be in sync with your T/A, but trust me when I tell you that this is one of those times when T/A is next to useless (If you don't believe me then just look at all the hedge funds going belly up with all of their mathmaticians, arbitragers and Technical Analysts now on the unemployment lines).

I gather from all of that you don't use any form of technical analysis so therefore you must rely on your knowledge of events and their history and your intuition? Ok, each to their own, I do the same thing on occasion. But I have to say that in recent times that method has proved very unreliable hence any additional data I can use to improve my odds is always welcome - the T/A (at which I am an extreme novice) did indeed signal the recent USD surge whereas my intuition suggested it was far from likely. But your idea that next year the Fed will raise rates and the UK Europe will lower rates is hardly proprietary information nor is it any great revelation. Ditto, predicting GBP at around 1.70 by year end doesn't require much foresight either since every commentator who can even spell the world Pound has being saying this.

[Naam]

Nevertheless we chartists make the dosh...

there, there... in thirty years of investing i never used a chart when making any buy or sell decision and guess what... i made dosh too

of course i look at charts dozens of times each and every day. they tell me what happened in the past. but i'm too uneducated to read the future out of charts

[Shotime]

Why are you trying to drag the $ into the discussion of the British Pound in freefall?

The $ seems to be doing pretty good against the Baht. As far as the Pound, Look Out Below!

[12DrinkMore]

What does England make a car a plane grow food how do they get money to give.

World Champions at making debt.

http://en.wikipedia.org/wiki/List_of_count...y_external_debt

USD 190,000 of external debt for every man, woman and child. Staggering. So for a family of four, that means USD 700,000 of debt owed abroad.

This list also conclusively proves that Aliens also exist, as the World collectively owes

54,310,000,000,000 US Dollars to them :D

[chiang mai]

Why are you trying to drag the $ into the discussion of the British Pound in freefall?

The $ seems to be doing pretty good against the Baht. As far as the Pound, Look Out Below!

If you want to understand where the Pound/Baht exchange rate is headed you have to follow the path of US Dollar/Pound, that's why.

[lannarebirth]

But your idea that next year the Fed will raise rates and the UK Europe will lower rates is hardly proprietary information nor is it any great revelation. Ditto, predicting GBP at around 1.70 by year end doesn't require much foresight either since every commentator who can even spell the world Pound has being saying this.

This is an example of why I hardly ever trade currencies. with that kind of pervasive sentiment, equities would more than likely br primed for a reversal. One just can't say with currencies. At least 85% of Forex transactions are by speculators, which can really take a market to extremes (look at oil). Really, the only currency I care about is my own.

[VegasVic]

Given that USD is way oversold and significant resistance exists at 1.80 and 1.75 I would guess that the current rally is going to run out of steam in the not too distant future, the question then becomes, where and what next. There's an argument in favour of getting out of USD at some point between those two resistance levels and moving into EUR for a couple of reasons. One reason is that whilst EUR/USD has been falling there is a multi-year trendline approaching which could reverse the trend. Secondly, given their respective interest rate strategies there must be a strong potential for the EUR to achieve new highs against USD in the short/medium term. Does anyone else see that potential?

CM, I realize that you meant that the Dollar was way overbought (short term), but what you seem to fail to realize is that the Dollar was way way oversold for the past 6-7 years. As far as that resisitance level for the pound at $1.75 or the Euro at $1.45 so often refered to here, apparently the worldwide FOREX traders were not made aware of those resistance levels because it looks like the pound will be trading in the $1.72's before the day is out and the Euro is looking to go below $1.43. There certainly could be some short term "dead cat bounce" for the EURO and the Pound, but the longer term trend for both curencies is down vs. the Dollar. A weakening Pound and EURO may very well be the saving grace for many European economies that are headed for some very tough times over the next 12-18 months, as unemployment rises throughout Europe at least the weakening currencies will bolster employment in the export sector.

Speaking technical, none of your price levels have/had any relevance. Neither is there resistance nor is or was there trend violation. The pounds uptrend was already broken around 1.92 while the Euro's uptrend is not even tested. Beyond that a broken trend doesnt mean an immediate reversal. But I know you Americans are fast with the gun

Thats right pardner we yanks are always packing iron and are quick on the draw, especially those of us in the wild west, in my part of the woods they call me Sedona slim You T/A guys are always good for a laugh I tell you what pard, 6 months from now if the Euro is back at $1.60 and the pound is back at $2.10 then feel free to throw all that T/A mumbo jumbo around and tell me how wrong I was, but for now weather you like it or not I have been spot on! Go back and check some of my posts from a few months ago and you will see that time and time again I was shouting from the rooftops to short oil in the upper $130's, short gold at $1000 and go long the dollar . If you go back a year ago you can see that I was predicting that the Shanghai composite would take a 50% haircut at some point before the Olympics, now I must admit that I was a little off on that one as the Shanghai composite actually lost 60% of its value before the Olympics I know that you technicians work awfully hard on those charts of yours, but sometimes you just need to throw the charts out of the window and this is one of those times. I am going to go out on a limb right here and now and predict that the Euro will see $1.35 vs. the Dollar before years end and the Pound will be very fortunate if it remains even a fraction above $1.70. As we enter 2009 look for the FED to begin increasing rates and look for the EU central bankers and the BOE to begin lowering rates as there backs will be to the wall. Now this might not all be in sync with your T/A, but trust me when I tell you that this is one of those times when T/A is next to useless (If you don't believe me then just look at all the hedge funds going belly up with all of their mathmaticians, arbitragers and Technical Analysts now on the unemployment lines).

I gather from all of that you don't use any form of technical analysis so therefore you must rely on your knowledge of events and their history and your intuition? Ok, each to their own, I do the same thing on occasion. But I have to say that in recent times that method has proved very unreliable hence any additional data I can use to improve my odds is always welcome - the T/A (at which I am an extreme novice) did indeed signal the recent USD surge whereas my intuition suggested it was far from likely. But your idea that next year the Fed will raise rates and the UK Europe will lower rates is hardly proprietary information nor is it any great revelation. Ditto, predicting GBP at around 1.70 by year end doesn't require much foresight either since every commentator who can even spell the world Pound has being saying this.

CM, While I agree wholeheartedly that my call on the FED increasing rates early next year at a time when the E.U. and BOE will be forced to cut rates, is indeed kind of like calling for the Sun to rise in the east and set in the west tomorrow, I will definately have to disagree with you that my call for the Pound to be around $1.70 (or possibly a touch lower) at years end does not require much foresight. It would seem that many here on TV seem to think that this current surge in the Dollar is a short term phenomena and they also seem to think that there is a some sort of hard bottom for the Pound at around $1.75 (I assume that their T/A charts are telling them this). I guess we will find out just how valuable T/A is over the next few months! In any event best of luck in your investments! My addage for next year by the way is "U.S. equity investments(and the Dollar) will shine in 2009"

[chiang mai]

Given that USD is way oversold and significant resistance exists at 1.80 and 1.75 I would guess that the current rally is going to run out of steam in the not too distant future, the question then becomes, where and what next. There's an argument in favour of getting out of USD at some point between those two resistance levels and moving into EUR for a couple of reasons. One reason is that whilst EUR/USD has been falling there is a multi-year trendline approaching which could reverse the trend. Secondly, given their respective interest rate strategies there must be a strong potential for the EUR to achieve new highs against USD in the short/medium term. Does anyone else see that potential?

CM, I realize that you meant that the Dollar was way overbought (short term), but what you seem to fail to realize is that the Dollar was way way oversold for the past 6-7 years. As far as that resisitance level for the pound at $1.75 or the Euro at $1.45 so often refered to here, apparently the worldwide FOREX traders were not made aware of those resistance levels because it looks like the pound will be trading in the $1.72's before the day is out and the Euro is looking to go below $1.43. There certainly could be some short term "dead cat bounce" for the EURO and the Pound, but the longer term trend for both curencies is down vs. the Dollar. A weakening Pound and EURO may very well be the saving grace for many European economies that are headed for some very tough times over the next 12-18 months, as unemployment rises throughout Europe at least the weakening currencies will bolster employment in the export sector.

Speaking technical, none of your price levels have/had any relevance. Neither is there resistance nor is or was there trend violation. The pounds uptrend was already broken around 1.92 while the Euro's uptrend is not even tested. Beyond that a broken trend doesnt mean an immediate reversal. But I know you Americans are fast with the gun

Thats right pardner we yanks are always packing iron and are quick on the draw, especially those of us in the wild west, in my part of the woods they call me Sedona slim You T/A guys are always good for a laugh I tell you what pard, 6 months from now if the Euro is back at $1.60 and the pound is back at $2.10 then feel free to throw all that T/A mumbo jumbo around and tell me how wrong I was, but for now weather you like it or not I have been spot on! Go back and check some of my posts from a few months ago and you will see that time and time again I was shouting from the rooftops to short oil in the upper $130's, short gold at $1000 and go long the dollar . If you go back a year ago you can see that I was predicting that the Shanghai composite would take a 50% haircut at some point before the Olympics, now I must admit that I was a little off on that one as the Shanghai composite actually lost 60% of its value before the Olympics I know that you technicians work awfully hard on those charts of yours, but sometimes you just need to throw the charts out of the window and this is one of those times. I am going to go out on a limb right here and now and predict that the Euro will see $1.35 vs. the Dollar before years end and the Pound will be very fortunate if it remains even a fraction above $1.70. As we enter 2009 look for the FED to begin increasing rates and look for the EU central bankers and the BOE to begin lowering rates as there backs will be to the wall. Now this might not all be in sync with your T/A, but trust me when I tell you that this is one of those times when T/A is next to useless (If you don't believe me then just look at all the hedge funds going belly up with all of their mathmaticians, arbitragers and Technical Analysts now on the unemployment lines).

I gather from all of that you don't use any form of technical analysis so therefore you must rely on your knowledge of events and their history and your intuition? Ok, each to their own, I do the same thing on occasion. But I have to say that in recent times that method has proved very unreliable hence any additional data I can use to improve my odds is always welcome - the T/A (at which I am an extreme novice) did indeed signal the recent USD surge whereas my intuition suggested it was far from likely. But your idea that next year the Fed will raise rates and the UK Europe will lower rates is hardly proprietary information nor is it any great revelation. Ditto, predicting GBP at around 1.70 by year end doesn't require much foresight either since every commentator who can even spell the world Pound has being saying this.

CM, While I agree wholeheartedly that my call on the FED increasing rates early next year at a time when the E.U. and BOE will be forced to cut rates, is indeed kind of like calling for the Sun to rise in the east and set in the west tomorrow, I will definately have to disagree with you that my call for the Pound to be around $1.70 (or possibly a touch lower) at years end does not require much foresight. It would seem that many here on TV seem to think that this current surge in the Dollar is a short term phenomena and they also seem to think that there is a some sort of hard bottom for the Pound at around $1.75 (I assume that their T/A charts are telling them this). I guess we will find out just how valuable T/A is over the next few months! In any event best of luck in your investments! My addage for next year by the way is "U.S. equity investments(and the Dollar) will shine in 2009"

It seems then that we agree on all points bar one - I can see the headlines in the FT just before New Year, "Vegas Vic and Chiang Mai stun market with their amazingly accurate prediction of GBP/USD at 1.68 - Naam loses his shirt".

[Hssl]

$ vs £

Not in the OP

My question why is the baht strong against any currency at the moment?

[pkrv]

A small transfer done a few moments ago 1,500 GBP a rate of 59.45 was all that was possible (and there was an additional 15 GBP fee to ensure the correct amount arrived at the other end.) I am not actually bad at this stuff - not good news.

[Kadafi]

After slightly rising the pound had a large drop against the dollar today, what i find hard to understand is..two of the largest companies in the world make a huge cock up and run into billions or trillions of debt and have to bail out by the US goverment as there is no other option and guess what THE US DOLLAR RISES FASTER! i guess a moderate problem in the UK causes awful side effects for the pound but a world record debt take over reflects magically on the US Dollar (I guess huge unemployment, recession, people defaulting and the two companies who control 50% of the US mortgages going bankrupt is great).

These two companies are part of the reason the world economy is in such a mess, all started from the US but now all the yanks are cheering how good there baht/exchange rate is going to become while the rest of the world mop up the mess they started!

The UK has economy problems but nothing compared to the US...!

[pkrv]

After slightly rising the pound had a large drop against the dollar today, what i find hard to understand is..two of the largest companies in the world make a huge cock up and run into billions or trillions of debt and have to bail out by the US goverment as there is no other option and guess what THE US DOLLAR RISES FASTER! i guess a moderate problem in the UK causes awful side effects for the pound but a world record debt take over reflects magically on the US Dollar (I guess huge unemployment, recession, people defaulting and the two companies who control 50% of the US mortgages going bankrupt is great).

These two companies are part of the reason the world economy is in such a mess, all started from the US but now all the yanks are cheering how good there baht/exchange rate is going to become while the rest of the world mop up the mess they started!

The UK has economy problems but nothing compared to the US...!

They probably packaged up the debt and sold it to those countries stupid enought to buy it - the UK comes to mind. A unique export market to say the least.

[Naam]

It seems then that we agree on all points bar one - I can see the headlines in the FT just before New Year, "Vegas Vic and Chiang Mai stun market with their amazingly accurate prediction of GBP/USD at 1.68 - Naam loses his shirt".

[lannarebirth]

After slightly rising the pound had a large drop against the dollar today, what i find hard to understand is..two of the largest companies in the world make a huge cock up and run into billions or trillions of debt and have to bail out by the US goverment as there is no other option and guess what THE US DOLLAR RISES FASTER! i guess a moderate problem in the UK causes awful side effects for the pound but a world record debt take over reflects magically on the US Dollar (I guess huge unemployment, recession, people defaulting and the two companies who control 50% of the US mortgages going bankrupt is great).

These two companies are part of the reason the world economy is in such a mess, all started from the US but now all the yanks are cheering how good there baht/exchange rate is going to become while the rest of the world mop up the mess they started!

The UK has economy problems but nothing compared to the US...!

It is a common mistake for people to try to "understand" why something is happening. the smartest in the group will focus on the "what", rather than the "how" or "why". If you think this is hard to understand, a GBP below parity would be a real mindbender wouldn't it?

[tijnebijn]

Well , just read an interesting story at bloomberg.com .

Sorry don't know how to create a link ..... stupid me .

An article about that the Sterling is still , even after the 16% decline already ,

is still another 2o% overvalued , and is predicting the Sterling might fall to 1.50

by July 2009 ......Also overvalued 5-10% against the Euro .

So not looking so good at all , could be less painful if the Baht also will depreciate

with the major currencies , but for now it looks like they stick with fighting inflation

instead of going for growth .

Just hope for the best .

[chiang mai]

Well , just read an interesting story at bloomberg.com .

Sorry don't know how to create a link ..... stupid me .

An article about that the Sterling is still , even after the 16% decline already ,

is still another 2o% overvalued , and is predicting the Sterling might fall to 1.50

by July 2009 ......Also overvalued 5-10% against the Euro .

So not looking so good at all , could be less painful if the Baht also will depreciate

with the major currencies , but for now it looks like they stick with fighting inflation

instead of going for growth .

Just hope for the best .

If you check in enough places you will find there is a full range of predictions as to where Sterling might be at various points in the future, including back up to USD 2.10. So I wouldn't get too anxious about the current state of play, unless you plan to hedge out of GBP now and I would suggest that now might be a little late in the day for that to be low risk. For what it's worth I reckon the Pound/Dollar to Baht picture might look better later in the year.

[chiang mai]

After slightly rising the pound had a large drop against the dollar today, what i find hard to understand is..two of the largest companies in the world make a huge cock up and run into billions or trillions of debt and have to bail out by the US goverment as there is no other option and guess what THE US DOLLAR RISES FASTER! i guess a moderate problem in the UK causes awful side effects for the pound but a world record debt take over reflects magically on the US Dollar (I guess huge unemployment, recession, people defaulting and the two companies who control 50% of the US mortgages going bankrupt is great).

These two companies are part of the reason the world economy is in such a mess, all started from the US but now all the yanks are cheering how good there baht/exchange rate is going to become while the rest of the world mop up the mess they started!

The UK has economy problems but nothing compared to the US...!

It is a common mistake for people to try to "understand" why something is happening. the smartest in the group will focus on the "what", rather than the "how" or "why". If you think this is hard to understand, a GBP below parity would be a real mindbender wouldn't it?

I have a good friend in the UK who is a currency trader and very patient when it comes to some of the silly questions I ask about USD and/or GBP. I asked him to explain the logic of a recent GBP rally that was starting to look quite serious on the day the BOE announced their most recent rate decision - I said that all factors considered it should not have happened. His reply was; looking for logic and 'reasons' in the markets is to condemn yourself to a life of frustration. Many people try to rationalise what is going on day-to-day but they are doing just that, rationalising and often you will see the logic given for a move in the morning completely reversed by the end of the day. His advice is to ignore all the news and just follow the charts. Nevertheless, it is a part of human nature (mine at least) to want to know the why's and the how's of these things.

[VegasVic]

Given that USD is way oversold and significant resistance exists at 1.80 and 1.75 I would guess that the current rally is going to run out of steam in the not too distant future, the question then becomes, where and what next. There's an argument in favour of getting out of USD at some point between those two resistance levels and moving into EUR for a couple of reasons. One reason is that whilst EUR/USD has been falling there is a multi-year trendline approaching which could reverse the trend. Secondly, given their respective interest rate strategies there must be a strong potential for the EUR to achieve new highs against USD in the short/medium term. Does anyone else see that potential?

The $USD was oversold, but it's been undergoing a "running correction". Excesses are being worked off while maintaining high relative price. 1.80 was weak long term support and 1.74 is the 50% retracement of it's multi-year run higher. Support is often found at at 50% retracements, but it hasn't shown an inclination to pause at support yet.

My wild guess is, that the GBP will find some support near 1.74-1.75, and if the $USD Index contimues to work off it's excesses in a running correction, then it will be another currencys turn to take the hit. Perhaps the Euro. That is if the running correction continues. The $USD is certainly due a pause, but it may not come soon.

I'm due to be spectacularly wrong soon.

Lanna, So far your view has been on the mark about the support for the Pound at the $1.74-$1.75 level! Although the Pound did dip below $1.75 today it has managed to rise back to $1.753 the last time I checked, the Euro on the other hand has been struggling to remain above $1.39 for most of the day and with oil ready to break down below the $100 level, it looks as though the Euro could very well be trading in the $1.38's or even the $1.37's tomorrow. Just curious to have your take on the Pound should oil head back to the $75-$80/bbl level. It's hard to imagine with all the economic turmoil that G.B. is in (or headed towards) and the propect of further rate cuts, that should oil make it to that level the Pound will be under immense selling pressure.

[lannarebirth]

Lanna, So far your view has been on the mark about the support for the Pound at the $1.74-$1.75 level! Although the Pound did dip below $1.75 today it has managed to rise back to $1.753 the last time I checked, the Euro on the other hand has been struggling to remain above $1.39 for most of the day and with oil ready to break down below the $100 level, it looks as though the Euro could very well be trading in the $1.38's or even the $1.37's tomorrow. Just curious to have your take on the Pound should oil head back to the $75-$80/bbl level. It's hard to imagine with all the economic turmoil that G.B. is in (or headed towards) and the propect of further rate cuts, that should oil make it to that level the Pound will be under immense selling pressure.

I don't really trade currencies much Vic, and if I did I would have no interest in trading minor wave moves. I look at it solely to pick a propitious entry for currency diversification away from $USD. I don't see anything like that currently.

As for the GBP, IMO it is an intermediate term price pattern that suggests it will trade at 1.64-1.65 at some point, and a long term price pattern that suggest it will return to 1.35-1.40 eventually. Neither of these patterns preclude the idea that it could make new highs, but I personally don't believe that will happen. I could be wrong, both about the downside targets and the upside limitations. Every third person here seems to be a currency trader, maybe they can lend more insight.

The only thing I know for certain is, that wherever it or the $USD or the Euro trade, it will have nothing to do with the price of oil, economic turmoil, or who is or will be president.

[yabaaaa]

I see the £ is tip toeing back up now against the $ and baht 62.40 t'uther day and $1.78 unpredictable for sure

[chiang mai]

It's going to be an interesting week for the Dollar/Pound with the future of Lehman, Merryll and AIG all in the balance. Meanwhile USD retreats and GBP/Baht has improved to almost 62. I can't see this lasting very long though, sure the Wall Street changes will have a short term impact but the case for interest rates and inflation versus the differing cycles between the US and the UK remains and surely means the currency positions will revert to the previous scenario before too long. Could be a small window here though for Brits to change Pounds for Baht before it all reverses, I mean, 62 (Bangkok Bank & Kasikorn) is better than 59? Interesting also that Pound/Baht is now 62.75 offshore, I wonder what that's all about!

Edited September 15, 2008 by chiang mai

[Naam]

Could be a small window here though for Brits to change Pounds for Baht before it all reverses, I mean, 62 (Bangkok Bank & Kasikorn) is better than 59? Interesting also that Pound/Baht is now 62.75 offshore, I wonder what that's all about!

last week i posted a message saying that the offshore rate is nowadays better but nobody cared. but i am sure some "experts" will keep on advising newbies "don't transfer Baht! you get a much better rate when transferring xyz-currency>"

[chiang mai]

Could be a small window here though for Brits to change Pounds for Baht before it all reverses, I mean, 62 (Bangkok Bank & Kasikorn) is better than 59? Interesting also that Pound/Baht is now 62.75 offshore, I wonder what that's all about!

last week i posted a message saying that the offshore rate is nowadays better but nobody cared. but i am sure some "experts" will keep on advising newbies "don't transfer Baht! you get a much better rate when transferring xyz-currency>"

I would have cared but I missed it, don't feel bad, we still love you.

[Bangyai]

See what the dollar is doing and is going to be doing in the near future. Dollar strong = Thai baht strong. With all the political termoil it is likely that the Thai economy is in for a tough time, especially with regards to the tourist industry. If the dollar stays strong and the Baht follows whoever is running the show in 6 months from now may have to devalue the baht again to try to lure back tourists etc. Only change as much as you have to.

There is no way the baht would be devalued to lure back tourists. It doesn't work like that. Tourism accounts for only 7% of GDP. Rice export prices are more important than tourists. It depends what you are exchanging against. So while it is true that the pound fell dramatically against the USD recently, as did the euro and aussie for that matter, the pound is not in freefall against the baht. In the last 3 years the GBPTHB hit it's lowest low at the end of December last year (about 57) Today it is 61.6. I expect to see further weakening of the baht considering the current political situation and state of the economy here which would further help on GBP xchange. The dollar has also strengthened against the baht.

Well, in another thread a few months back I mentioned a possible 4-5% devaluation and I see now that it is being requested of the govournment in order to help exports and a hard hit tourist industry. I don't think its an ' if ' anymore, more likely a when .