Brits Wake Up! Pound To Drop 40% Against Euro?

[Harmonica]

Don't worry, I'm not a snitch. Were I one, given the terrible America bashing that has gone on here in this Brit-infested haven, Uncle George would respond to my distress call & send in Microsoft (with General Electric as backup) & put all you has-beens in the poorhouse poy-manently!

But I'm going to do what Americans do best -- bail the Brits out of trouble, hehehehe!

Let's get to it then, shall we?

Remember George Soros? Back in 1992, George Soros had the foreskin to go against the Bank of England and in a single currency trade, earn himself $1.1 billion.

There is now a rumor that the Pound is going to drop by 40% against the euro -- if this is true expect Soros to play a big role -- he won't be able to resist it!

InvestmentAndBusinessNews.co.uk reported that because of the UK's balance of payments deficit, a couple of respected British think tanks have recently warned that “sterling could fall as much as 40% against the euro over the next couple of years.”

They say that Pound/US Dollar will likely not be affected by this move in the cross rate.

That is what they're saying.

------------------------------

Their reasons, as always, are based on "fundamental" evaluation. It is possible that their prediction might come true, but I believe that the problem needs a technical perspective.

I don't have any opinion on this subject at the moment but I am going to get the Euro/British Pound data within the next week and take a long hard look at this possible opportunity/catastrophy in the making.

And for an equalizer, remember your accusations about how Americans are so terribly ignorant on the subject of Geography? -- well, when it comes to currencies, the Brits are so stuck on the Pound that the Dollar might just as well be located in Chonburi for all they care, hehehehe!

[The_Moog]

Whats been happening to GBP/Euro and Cable in the last few months.

Looks like you might be the last one to lick this lollipop.

ps Style note: Nobody talks in a goggly way about Soros anymore - apart from old crumblies !

[britmaveric]

Soros is a joke. How much did he spend on the last yank presidential election?

Sterling is solid as rock. Take it to the bank - euro is more likely to lose 40% than sterling, put your dosh there so called experts are full of sh*te!

Edited July 16, 2005 by britmaveric

[chownah]

So if the pound looses 40% against the euro and the pound does not change against the dollar then the dollar must lose 40% against the euro too?

[~G~]

InvestmentAndBusinessNews.co.uk reported  that because of the UK's balance of payments deficit, a couple of respected British think tanks have recently warned that “sterling could fall as much as 40% against the euro over the next couple of years.”

They say that Pound/US Dollar  will likely not be affected by this move in the cross rate.

GBP/EUR loosing 40%, GBP/USD not being affected

implies

USD/EUR looses 40%

Meaning the USD should dive just as much as the pound. All of that because the UK's payment deficit.

edit: oops just saw chownah's post.

Edited July 16, 2005 by ~G~

[samran]

Two spanners in the works:

Look at the AUD. Trading at very strong levels against the GBP, USD and EUR. Australia has been racking up record deficit numbers.

Soros won't attack the pound, there is no point. Last time he did it the pound was part of the European Exchange Mechanism, virtually tied to a basket of old EU national currencies. So it was easy for him to leverage himself and take on a central bank with limited reserves to defend itself (edit).

If he tried to attack the currency now, he'd more or less be betting against himself. Unless he can manage to somehow create a massive uncertainty about the UK economy, one of the only shining stars (relatively) in the EU, then he isn't going to be too lucky.

Edited July 16, 2005 by samran

[Harmonica]

Whats been happening to GBP/Euro and Cable in the last few months.

Looks like you might be the last one to lick this lollipop.

ps Style note: Nobody talks in a goggly way about Soros anymore - apart from old crumblies !

Not sure I follow you, Moog -- "goggly" and "crumblies" ........ ???

[Harmonica]

Soros is a joke. How much did he spend on the last yank presidential election?

Sterling is solid as rock. Take it to the bank - euro is more likely to lose 40% than sterling, put your dosh there so called experts are full of sh*te!

britmaveric,

No doubt that Soros is not liked -- in Thailand he would be lynched and even came close to it had he actually arrived last year!

But he is not to be underestimated businesswise -- he's pulled off quite a few stunning moves in the past.

But I'm more interested in what this special UK think tank is saying and er, thinking -- more importantly how deeply are they expecting this scenario?

I dug up some price charts for the Euro/GBP and they don't look worth a ###### to me in terms of accuracy -- I'm going to straighten out the data side sometime next week when I contact Reuters DataLink stateside.

40% is a whopper of a move and if there is any truth to it, man I have friends who could get caught on the wrong side of this.

Thanks for your input

[Harmonica]

So if the pound looses 40% against the euro and the pound does not change against the dollar then the dollar must lose 40% against the euro too?

that seems to be the implication, chownah, but it stinks to high heaven.

Currency pairs are very unpredictable when you jump from and/or extrapolate from one to the other.

Seems to me that when a story such as this comes out it might behoove us to get the data for Euro/GBP and Euro/Dollar and Dollar/GBP and look at all 3 pairs for clues.

There is no arithmetic symbiosis -- had such a gift existed it would make my life a heck of a lot easier.

I have no doubt that Soros has got out his research team and will devour the data that the British think tank is working on -- if the trend does go that way, he will exacerbate it further by hammering billions at it. His style is merciless.

One of my good buddies, a relatively young Englishman is planning to retire to LOS in the next year and he will get killed with a 40% drop in the pound if the Pound/Thai Baht relationship also takes a negative swing.

[The_Moog]

Not sure I follow you, Moog -- "goggly" and "crumblies" ........ ???

Thousands more hedge funds now than in the Soros/Quantum heyday.

Hot money swings magnified.

[Harmonica]

Two spanners in the works:

Look at the AUD. Trading at very strong levels against the GBP, USD and EUR. Australia has been racking up record deficit numbers.

Soros won't attack the pound, there is no point. Last time he did it the pound was part of the European Exchange Mechanism, virtually tied to a basket of old EU national currencies. So it was easy for him to leverage himself and take on a central bank with limited reserves to defend itself (edit).

If he tried to attack the currency now, he'd more or less be betting against himself. Unless he can manage to somehow create a massive uncertainty about the UK economy, one of the only shining stars (relatively) in the EU, then he isn't going to be too lucky.

All valid points samran -- but ..... the next few days ought to turn up some ideas. Thanks.

[~G~]

given the terrible America bashing that has gone on here in this Brit-infested haven,  Uncle George would respond to my distress call & send in Microsoft (with General Electric as backup) & put all you has-beens in the poorhouse poy-manently!   

Harmonica, I hope you don't hold any pounds - be careful - given your affection to Brits, the queen might jump out of one of these bills and bite your fingers!

[Harmonica]

The chart is from EWI and it has their own wave numbering analysis -- I have not done mine as yet due to the fact that I don't have the necessary data.

But their chart suggests that EURGBP is in a long-term downtrend but that an upward correction (rally) is going on currently. Actually, as per the chart Euro has been beating the Pound since the bottom in 2000. Do you see that? Not evident is how long this will continue -- another difficulty is that data for the euro is kind of short in terms of history.

[chico]

the queen might jump out of one of those bills and bite your fingers

55555555555

to Harmonica:

if there should be a drop, I don't believe it will be that drastic, and a change against one currency does not necessarily imply a similar one against another.

take the recent drop of the euro against the $, but almost no change aginst the baht for exemple.

[Harmonica]

given the terrible America bashing that has gone on here in this Brit-infested haven,  Uncle George would respond to my distress call & send in Microsoft (with General Electric as backup) & put all you has-beens in the poorhouse poy-manently!    

Harmonica, I hope you don't hold any pounds - be careful - given your affection to Brits, the queen might jump out of one of these bills and bite your fingers!

Yeah G, I also remember another Brit telling me in a financial thread that "bottom pickers get smelly fingers"

But I've actually got to thank them for I am now definitely and thoroughly interested in learning as much as I can about the British Pound.

In the past I played the Euro/Dollar, Dollar/Yen and Dollar/Thai Baht relationships to the hilt and the Dollar, as everybody now knows has been winning against most currencies for several months.

But complacency is a killer and can cause huge losses thru' being on the wrong side of the market.

I have, as of today added the Pound, Swiss Franc, Australian Dollar & New Zealand Dollar (chuchok will be happy with this addition ) to my homework package.

And I came to LOS to relax -- fat chance now with all this new commotion!

[Harmonica]

And G, to continue, when the Dollar's run is finished, I'm going to have to find something other than Thai Baht, Yen or Euro and/or Gold.

But down the road if the Dollar does succumb, what then? Which currency?

Maybe the Lord does work in mysterious ways -- its been 25 years since my last confession, but he must still like me to have sent me such a profound message today -- and profound it most certainly is -- I've got a good feeling about it!

Don't worry guys, I'm not overly religious!

[Harmonica]

the queen might jump out of one of those bills and bite your fingers

55555555555

to Harmonica:

if there should be a drop, I don't believe it will be that drastic, and a change against one currency does not necessarily imply a similar one against another.

take the recent drop of the euro against the $, but almost no change aginst the baht for exemple.

yeah chico, that is what I believe. Thanks.

[~G~]

given the terrible America bashing that has gone on here in this Brit-infested haven,  Uncle George would respond to my distress call & send in Microsoft (with General Electric as backup) & put all you has-beens in the poorhouse poy-manently!    

Harmonica, I hope you don't hold any pounds - be careful - given your affection to Brits, the queen might jump out of one of these bills and bite your fingers!

<{POST_SNAPBACK}>

Yeah G, I also remember another Brit telling me in a financial thread that "bottom pickers get smelly fingers"

But I've actually got to thank them for I am now definitely and thoroughly interested in learning as much as I can about the British Pound.

In the past I played the Euro/Dollar, Dollar/Yen and Dollar/Thai Baht relationships to the hilt and the Dollar, as everybody now knows has been winning against most currencies for several months.

But complacency is a killer and can cause huge losses thru' being on the wrong side of the market.

I have, as of today added the Pound, Swiss Franc, Australian Dollar & New Zealand Dollar (chuchok will be happy with this addition ) to my homework package.

And I came to LOS to relax -- fat chance now with all this new commotion!

<{POST_SNAPBACK}>

Let me know when you add the ILS. Heavily depenednt on the USD, of course, but has its moments.

[Harmonica]

given the terrible America bashing that has gone on here in this Brit-infested haven,  Uncle George would respond to my distress call & send in Microsoft (with General Electric as backup) & put all you has-beens in the poorhouse poy-manently!    

Harmonica, I hope you don't hold any pounds - be careful - given your affection to Brits, the queen might jump out of one of these bills and bite your fingers!

Yeah G, I also remember another Brit telling me in a financial thread that "bottom pickers get smelly fingers"

But I've actually got to thank them for I am now definitely and thoroughly interested in learning as much as I can about the British Pound.

In the past I played the Euro/Dollar, Dollar/Yen and Dollar/Thai Baht relationships to the hilt and the Dollar, as everybody now knows has been winning against most currencies for several months.

But complacency is a killer and can cause huge losses thru' being on the wrong side of the market.

I have, as of today added the Pound, Swiss Franc, Australian Dollar & New Zealand Dollar (chuchok will be happy with this addition ) to my homework package.

And I came to LOS to relax -- fat chance now with all this new commotion!

Let me know when you add the ILS. Heavily depenednt on the USD, of course, but has its moments.

Why G? Your reasons for the addition of ILS? We are talking long-term here, right?

[~G~]

Why G?  Your reasons for the addition of ILS?  We are talking long-term here, right?

<{POST_SNAPBACK}>

Pretty simple, I happen to be a citizen of that country!

And... would love to hear you opinion about it, vs USD or EUR, for example.

Edited July 16, 2005 by ~G~

[Harmonica]

Why G?  Your reasons for the addition of ILS?  We are talking long-term here, right?

Pretty simple, I happen to be a citizen of that country!

And... would love to hear you opinion about it, vs USD or EUR, for example.

OK, my friend, I'll see if Reuters has the data available for download. I might need a couple weeks to perhaps a month to get up to speed on these new additions.

So we don't need to do a crossrate here w.r.t Pound etc, -- just straight vs Euro and Dollar. That shouldn't be too difficult once I have the data.

Thanks for the input.

[paulsenp]

the queen might jump out of one of those bills and bite your fingers

55555555555

to Harmonica:

if there should be a drop, I don't believe it will be that drastic, and a change against one currency does not necessarily imply a similar one against another.

take the recent drop of the euro against the $, but almost no change aginst the baht for exemple.

<{POST_SNAPBACK}>

yeah chico, that is what I believe. Thanks.

<{POST_SNAPBACK}>

But then what did really happen? Isn't it the $ which rose against the Euro and Baht (and other currencies as well)?

[Harmonica]

the queen might jump out of one of those bills and bite your fingers

55555555555

to Harmonica:

if there should be a drop, I don't believe it will be that drastic, and a change against one currency does not necessarily imply a similar one against another.

take the recent drop of the euro against the $, but almost no change aginst the baht for exemple.

yeah chico, that is what I believe. Thanks.

But then what did really happen? Isn't it the $ which rose against the Euro and Baht (and other currencies as well)?

Yes the $ did rise versus both the Euro and the Baht -- that is easily seen with the $ as pivot -- however what about the Euro vs Baht? With the Euro as pivot, things could look considerably different. That is what chico is referring to, I believe.

One thing I have determined is that it is folly to assume that just because one pair is behaving in a particular manner, that a corresponding pair will therefore behave in an arithmetically inductive way.

[paulsenp]

the queen might jump out of one of those bills and bite your fingers

55555555555

to Harmonica:

if there should be a drop, I don't believe it will be that drastic, and a change against one currency does not necessarily imply a similar one against another.

take the recent drop of the euro against the $, but almost no change aginst the baht for exemple.

<{POST_SNAPBACK}>

yeah chico, that is what I believe. Thanks.

<{POST_SNAPBACK}>

But then what did really happen? Isn't it the $ which rose against the Euro and Baht (and other currencies as well)?

<{POST_SNAPBACK}>

Yes the $ did rise versus both the Euro and the Baht -- that is easily seen with the $ as pivot -- however what about the Euro vs Baht? With the Euro as pivot, things could look considerably different. That is what chico is referring to, I believe.

One thing I have determined is that it is folly to assume that just because one pair is behaving in a particular manner, that a corresponding pair will therefore behave in an arithmetically inductive way.

<{POST_SNAPBACK}>

What I am trying to say is just, that since the $ rose against a number of currencies, it feels more right to say it in this way, instead of saying that all those other currencies dropped against the $. The reason for the change came from the US, or?

[chownah]

Harmonica, In the original post you predicted the Pound would drop 40% relative to the Euro and that the Pound would stay constant against the Dollar. Are you then predicting that the Dollar will drop 40% against the Euro? If not then please explain how this can happen.

Chownah

[Harmonica]

Harmonica,  In the original post you predicted the Pound would drop 40% relative to the Euro and that the Pound would stay constant against the Dollar.  Are you then predicting that the Dollar will drop 40% against the Euro?  If not then please explain how this can happen.

Chownah

Please re-read the original post, chownah.

I said quite clearly that "I do not have an opinion on this subject just yet"

So just to reiterate, I am going to collect data (started already) and express my own personal technical opinion about the veracity of such a claim sometime within the next several days.

The post to follow this one has some initial points that I have observed right off the bat!

[Harmonica]

General clarification for all readers:

The original post contains what THEY're saying. Who's "they"? .... the experts and the publication mentioned.

Do I personally agree with what they have said?

I neither agree nor disagree -- I need to do my homework first. That is where I currently stand. OK?

My opinion will be expressed in the course of the next several days, OK?

[Harmonica]

OK guys, I have checked the one EuroGBP (Euro/British Pound) chart in my possession for likely errors -- it looks very much similar to the one from EWI, so I think we can proceed.

Let's talk about the future in later posts -- this first opinion on the EUROGBP refers only to what has already occurred.

Refer to the chart below:

The Euro weakened considerably versus the Pound all the way to October 2000.

Then Euro staged a comeback. This comeback has now been in effect for 4.5 years.

Why am I bringing this up? .. something that has already transpired and is already forgotten?

Because those who just religiously held Sterling when it was thrashing the Dollar, would have done considerably better had they switched to Euro. And even if you missed the actual bottom in October 2000, surely a year later you would have recognized that something was amiss?

OK?

As to whether Sterling will or will not lose 40% versus Euro in the future -- I'm working on an answer. More time reqd.

Adios!

[haha]

the value of material things including money is based on belief.

brainwashing has been a favorite activity in the world lately. so, why not give it a shot, right?

good luck.

[Harmonica]

the queen might jump out of one of those bills and bite your fingers

55555555555

to Harmonica:

if there should be a drop, I don't believe it will be that drastic, and a change against one currency does not necessarily imply a similar one against another.

take the recent drop of the euro against the $, but almost no change aginst the baht for exemple.

yeah chico, that is what I believe. Thanks.

But then what did really happen? Isn't it the $ which rose against the Euro and Baht (and other currencies as well)?

Yes the $ did rise versus both the Euro and the Baht -- that is easily seen with the $ as pivot -- however what about the Euro vs Baht? With the Euro as pivot, things could look considerably different. That is what chico is referring to, I believe.

One thing I have determined is that it is folly to assume that just because one pair is behaving in a particular manner, that a corresponding pair will therefore behave in an arithmetically inductive way.

What I am trying to say is just, that since the $ rose against a number of currencies, it feels more right to say it in this way, instead of saying that all those other currencies dropped against the $ . The reason for the change came from the US, or?

Correct!