I the £ on an up againt the euro???

[chirpy]

The recent strenth of the pound  v the euro is I suppoe a move due to uk coming out, slowly, from recesion at last...........although once Obama threatens to sort out the banks ,the strength slides down again....Is that a corect asumption and how do others see the months ahead ,especially for retirees in France dependent on a sterling pension.

p.s. by sterling I mean pounds sterling   and not a fat pension.[:D]

[Northender]

The Euro has been overvalued for sometime now , whether or not the pound will gain strength , will depend to a large extent on the result of the UK Elections this spring.

The markets do not like uncertainty and if there is a whiff of an "hung" parliament , well ..........

[NormanH]

Fell heavily again these last two days..

[baypond]

Europe and UK are both suffering head winds as they move back to growth. In the UK, the election, rising inflation (potentially causing higher interest rates sooner) and the withdrawl of fiscal (govt spending) pump priming, and end of QE could all cause GDP to remain sluggish for the next year or so. In Europe, specifically in EMU there is the problem that Greece, and a lesser extent Spain and Ireland, did what the UK did, which was to spend too much in the good times, and have no buffer for the current bad times. For the UK it is not deemed as bad as they have a flexible exchange rate which allows the UK to see their currency depreciate and help rebalance the economy. Unfortunately in a fixed exchange rate, once size does not fit all. Countries like Greece should probably need to see their currency weaken to help the economic adjustment, but it can't, so has to take politically unpalatable fiscal measure to reign in govt spending and prevent a default. This particular problem will not be sorted out in 1 or 2 months, but probably take a year or two to play out. This could become a constant uncertainty for the EURO. In additions Societe Generales results were quite a nasty suprise. All the US banks have declared/revealed their losses and holdings of poor mortgage books and credit card portfolios. SOCGEN marked their down at the end of three quarters when US banks saw the value of their bad assets increase. The question now is, how much bad debt do the European banks have on their books that they havnt revealed. If it is a lot, then the ECB may well have to keep liquidity pushed in to the economy to help fund these banks.

My best guess at the moment is that the GBP/EUR could move to 1.2000, and maybe we have removed the risk of a move to par for the time being. But I would'nt bet on the type of move we saw when the pound went from 1.45 to 1.05 in a few months.

Polls this morning put conservatives back in the driving seat... lets see because a hung parliament might mean a UK downgrade.

[Boscoe]

Terrible GDP growth of 0.1%, well below estimates (and possible going to be a adjusted down). Last month alone the UK government borrowed £15,700,000,000 QE stands at 200,000,000,000. To put this into perspective, there are 28,920,000 people employed in the UK so that's £6,915 per working person!

The pre-Budget Report's

forecast of a bill of £30.7 billion for the financial year ending in

April. Economists increasingly forecast that, the cost of servicing the country's debt will in fact be more like £60 billion. As the European Central Bank has relied much less on QE and investors are looking favourably towards Euro debt as a safer bet and are already talking about (and actioning) dumping UK gilts. Bill Gross, the head of Pimco, the world’s biggest bond investor, said in a

letter to investors: “UK is a must to avoid…[British Government] gilts

resting on a bed of nitro-glycerine”. BNP Paribas, the biggest French bank, said it was now “massively bearish

[negative] on the pound”.

What does this mean? Well IMHO it wouldn't surprise me one little bit if the UK credit rating gets downgraded before the election, the situation is bad for the UK and sterling now, but if this happens, there will be a run on the pound and a further major slide against other major currencies.

Euro/pound parity - we should be so lucky!

[Bugsy]

At least the UK is now out of recession

Quote:

"The Office of National Statistics confirmed the end of the longest

downturn in post-war history thanks to a chubby woman in Doncaster

buying a Cadbury's Boost from a Shell garage at 11.20pm on New Year's

Eve."

[:D][:D][:D]

[Benjamin]

Has anyone noticed that the growth in the economy of 0.10% is the same as most instant access savings account rates are paying at the moment and I don't know anyone who's excited about that.  [:@]

[Martin963]

As Boscoe says,  a downgrade looks very possible.

I hope - should it happen - that it does indeed take place BEFORE the General Election.  Then those who haven't realised - or refuse to acknowledge - whose fault it is will be reminded of the facts.

[Boscoe]

I truly hope I'm being pessimistic, and the UK avoids a downgrade, but the politicians need to stop 'politicking' and start governing, only fools believe that there will be no cuts in services and tax rises to get the UK out of the mess it's in, better to do what needs to be done now, but with an election looming I don't think any party will have to b*lls to come clean and tell it how it is, and Labour will continue to lie to the electorate, drive us deeper into debt (and possibly back into recession) in the vein hope of what? Getting one or two percent more seats in the election? The very worst outcome of the GE is a hung parliament, if that happens every man and his dog will be shorting the FTSE and sterling, the agencies will definitely then downgrade the UK and it's sunk, taking the pound with it...

[Martin963]

Sadly I don't think you're being pessimistic.   Disaster may well be round the corner,  just as it was when the Callaghan/Healey/Benn crew led us to ruin in 1975 - 77.   Only the IMF's tough medicine saved us,  and do you know I heard Benn not so long ago STILL saying that Britain's ills under Labour 1974 - 1979 were all the fault of "international financiers";  (those of you who remember him will be able to imagine the snarling contempt in his voice as he said those two words).

As much contempt as I have for him and for this pathetic delusional crew in charge now.

I know it's strong language,   but if Boscoe's vision comes true it'll seem a mild condemnation......

[Bugsy]

Will it hit 1.16 today ? (1.1589 now)

C'mon everybody........................ PUSH !!!!!!!!!

.

[Bugsy]

1.1590 now, c'mon just a little more........[:)]

[Bugsy]

Well done everyone 1.1603

Whats the betting it drops before my monthly pension gets paid. [:(]

[Gardengirl]

11.28; OH's computer is showing 1.16. I assume it's linked in to exchange links somewhere. ;o)

[Gardengirl]

Not only was your's quicker - I prefer yours a lot! ;o)

[Bugsy]

Click

[Alan Zoff]

No, you're alright, it will keep going up because I've just transferred some sterling

[mint]

Just sent OH down to the ATP with both our debit cards to get our max allowable amounts.

How long can it last and does it make you feel a bit like you are dreaming?

[Northender]

There's only one way the Euro is heading in the short term , after several comments from European political figures in the past few days.

Whether or not the GBP benefits will depend on the UK opinion polls I guess and eventually the outcome on May 6th.

It's all down to politics.

[NormanH]

People would have to be transferring a lot more money than I will ever see for these small movements to make much difference.

If you bring over £1000 the latest rise might add 50 Euros or so..

[Bugsy]

[quote user="NormanH"]

If you bring over £1000 the latest rise might add 50 Euros or so..

[/quote]

......................and fifty euros is fifty euros.

That will fill up my car, thank you.(well, very nearly [:)])

.

[NormanH]

Given the recent publicity over problems in the Eurozone (admittedly not totally new) can anyone explain why the pound is back down to 1,143 at the moment of posting?

[AnOther]

I think the retreat of the £ is due to several factors. Principally the disappointing growth figure of 0.1% when the expectation had been nearer 0.4%, but also in part the end to quantitative easing further exacerbated by inflation which reached 2.9% in December, up a full 1% from the previous month. There is also nervousness over the upcoming election and the dogged refusal of Moron or Cameron to put their cards on the table and spell how they plan to tackle the UK debt crisis, which incidentally, if public and private debt are taken together, represents 466% of GDP actually placing UK in a worse position than Greece and within a whisker of the worlds long term basket case, Japan, at 471%. Make no mistake, if the UK were in the Euro they would not be talking of the PIGS but the SUKPIGs [:'(]

If any of our leaders were the least bit interested in the welfare and future of the country then instead of trying to cling on to or achieve power at any cost they would be voluntarily forming a crisis coalition to come up with some cohesive plans, and damn quickly too.

Concurrently we all know that the € is under pressure because of the PIGS but looking at the relevent exchange rates it's almost uncanny how the £/€ and €/$ declines track each other [blink]

[IMG]http://i127.photobucket.com/albums/p123/biskitboyo/EURUSD.jpg[/IMG]

[IMG]http://i127.photobucket.com/albums/p123/biskitboyo/GBPUSD.jpg[/IMG]

[Jay]

[quote user="NormanH"]Given the recent publicity over problems in the Eurozone (admittedly not totally new) can anyone explain why the pound is back down to 1,143 at the moment of posting?

[/quote]

I also think it odd especially when you read this Traders make $8bn bet against euro

[Quillan]

[quote user="Jay"][quote user="NormanH"]Given the recent publicity over problems in the Eurozone (admittedly not totally new) can anyone explain why the pound is back down to 1,143 at the moment of posting?
[/quote]

I also think it odd especially when you read this Traders make $8bn bet against euro[/quote]

Right now we know who it is that brings the pound down when they speak/write, 08:43 (CET) 1.138 [:P]