Bugsy Posted October 25, 2010 Share Posted October 25, 2010 seems to be in free-fall at the moment 1.11 this morning. Link to comment Share on other sites More sharing options...
just john Posted October 25, 2010 Share Posted October 25, 2010 Me too, I thought after HMG details of cutback that would change, obviously it's not good enough, what I'm struggling to understand is why the Euro news is not dragging the Euro down[8-)] Link to comment Share on other sites More sharing options...
NickP Posted October 25, 2010 Share Posted October 25, 2010 I think that you will find that the "city" and the government want the pound low to encourage exports. Also those in power have their holiday homes in the Bahamas so they don't care about the Euro V sterling [:D] Link to comment Share on other sites More sharing options...
Chancer Posted October 25, 2010 Share Posted October 25, 2010 Having spent 5 days in the UK and seeing how the new austerity budget was generally accepted by all I thought the pound would strengthen against the Euro, on the boat over last night the taking the mid price between buy and sell rates at the bureau de change made me think it had recovered to €1.20.Quite a shock to check on line this morning.Does anyone know why? I can understand NickP's comment about what the government wants but that does not automatically mean what it wants it gets does it? Link to comment Share on other sites More sharing options...
Quillan Posted October 25, 2010 Share Posted October 25, 2010 Have a look at the reports on the G20 summit thats just ended. Link to comment Share on other sites More sharing options...
powerdesal Posted October 25, 2010 Share Posted October 25, 2010 Could someone explain just how the Govt and those in power manage to drive the exchange rates. I always thought the rate was effectively set by the international markets. If nobody wants to buy Sterling then its value falls, is it not so? (albeit a bit simplistic) Link to comment Share on other sites More sharing options...
mint Posted October 25, 2010 Share Posted October 25, 2010 I think the explanation has to do with the fact that I shall be exchanging a considerable sum to buy our new house and this is just to test my nerves.Well, this girl's nerves are like............well, perhaps not steel, but certainly far from wobbly (unlike the blasted pound). Link to comment Share on other sites More sharing options...
Mr Coeur de Lion Posted October 25, 2010 Share Posted October 25, 2010 Finally the exchange rate is in my favour. All my money is in Australia and I am tossing up whether to exchange it into pounds, euros or US dollars, each are very attractive to buy at present.For the past five years I have been crucified, finally I get a turn on top! Link to comment Share on other sites More sharing options...
just john Posted October 25, 2010 Share Posted October 25, 2010 Almost certainly your spending is bound to have a massive effect sweet, but I don't think it's the only cause is it? telegraph. Pound-forecast-to-tumble-on-insane-spending-cuts. Link to comment Share on other sites More sharing options...
Pierre ZFP Posted October 25, 2010 Share Posted October 25, 2010 I heard a report on the BBC that China was seeking to keep its currency weak and was buying huge amounts of Euros. Might just be idle thinking though. It it was so then preumably China would be buying Pounds too? Anyway, what is bad news for some is great for me as I get paid in Euros so its like getting a pay rise Link to comment Share on other sites More sharing options...
NormanH Posted October 25, 2010 Share Posted October 25, 2010 [quote user="just john "]Almost certainly your spending is bound to have a massive effect sweet, but I don't think it's the only cause is it? telegraph. Pound-forecast-to-tumble-on-insane-spending-cuts. [/quote]Perhaps Alistair Darling was right?? Link to comment Share on other sites More sharing options...
woolybanana Posted October 25, 2010 Share Posted October 25, 2010 Nah, not possible! Link to comment Share on other sites More sharing options...
Braco Posted October 25, 2010 Share Posted October 25, 2010 The fall in the pound is simply the markets reaction to the governments spending plans – too little on the cut backs front - government spending will actually rise over the next 4 years, quantitative easing – another tranche highly likely, and growth prospects – two chances and in this climate of insecurity nil is the best of the two. Link to comment Share on other sites More sharing options...
Kitty Posted October 25, 2010 Share Posted October 25, 2010 The weak pound is having a positive effect on engineering companies in the Bristol area (Brissle, to JJ). I have been chatting to a number of people in specialist S.W.England companies and order books are filling up. I was quite surprised as I previously thought the business news to be all gloom and doom.I watched the PM's speech to the CBI this morning and was quite buoyed up for UK prospects afterwards. Link to comment Share on other sites More sharing options...
crossy67 Posted October 26, 2010 Share Posted October 26, 2010 How we've sewn the seeds of our own demise eh? We all love buying the cheep Chinese goods but now have given them enough capitol to seriously challenge the worlds economy. Link to comment Share on other sites More sharing options...
tonyv Posted October 26, 2010 Share Posted October 26, 2010 well, this morning we've seen it shooting up on the better than expected news on the UK economy Link to comment Share on other sites More sharing options...
DerekJ Posted October 26, 2010 Share Posted October 26, 2010 Reported today... UK growth grew at double the pace forecast by economists in the third quarter at 0.8%. This has resulted in immediate signs of a small improvement in the £/Euro rate as more QE looks like it may be put on hold for a while longer. Link to comment Share on other sites More sharing options...
Gluestick Posted October 26, 2010 Share Posted October 26, 2010 [quote user="Pierre ZFP"]I heard a report on the BBC that China was seeking to keep its currency weak and was buying huge amounts of Euros. Might just be idle thinking though. It it was so then preumably China would be buying Pounds too? Anyway, what is bad news for some is great for me as I get paid in Euros so its like getting a pay rise [/quote]Despite much huffing and puffing from US Sec. Treas. Timothy Geithner, sort of demanding China revalues the Renimbi, China's Sovereign Risk Funds have been investing heavily in EU Government Bonds, denominated in Euros.Mainly to undermine the cross-value of the US$, one suspects!Also interesting that the Japanese Yen is at its highest value against the US$ for some 16 years......The separate fiscal woes and debts of the sick men of Eurozone, will sink the Euro to more manageable levels yet, I suspect.That said and despite the earlier upbeat metrics on the UK economy, thereafter it is forecast to shrink once again: and mortgage lending has severely retrenched.Anybody's guess right now: and my crystal ball recently imploded![:-))] Link to comment Share on other sites More sharing options...
just john Posted October 27, 2010 Share Posted October 27, 2010 [quote user="Cathy"] (Brissle, to JJ). [/quote]You know how I hate pedantic people Cath, but . . . Amazon - Load-Old-Bristle---Waiters-peak-Bristle[:D]As for the economy, there is so much smoke and mirrors I have no idea of reality any more, the UK is so far down the tube and struggling to cut sums equivalent to the interest only on UK debt, yet the sick Euro goes from strength to strength[8-)].Greece has just increased it's debt by taking out a six month loan just to pay 2 months interest, their railway supported by the state costs around 7 billion euro to run yet only takes a billion in revenue, so of course the government suggests that they cut staff in half (WB no, not literally), everybody strikes; plan shelved. Hellenic Railway losses, mount at the rate of 3 million euros a day, Debt is now $13 billion, or about 5 percent of Greece’s gross domestic product. In the Peloponnese region train drivers are paid up to 95,000 EUR a year, and very often run empty. Employees earn four times more in salaries than total ticket salesGreece thinks the French rail network could take 49 percent stake and assume Hellenic’s liabilities and losses. The company pays three times revenue in interest expenses. [:'(]So how long can the Euro stay up . . . [blink] Link to comment Share on other sites More sharing options...
Gluestick Posted October 29, 2010 Share Posted October 29, 2010 Eurozone: Now this is hilariously funny! Forget the concept of an aggregated economic bloc and its wholly synthetic currency: think simply, in terms of a family. Your family unit is financially strained: Mum's OK, 'cos she keeps within her weekly spend budget: Dad's a right problem, 'cos he spends money like water and runs up huge credit card debts. Young Brian is same as Dad: Maureen is more like Mum: however young Rodney is a raging nutter: borrowing from all and sundry, taking credit he cannot afford from anyone stupid enough to accommodate him and each and every week, spends far more than his low income. Some bright spark comes up with a "Solution"! The family will take money from each member each week and save this in a central emergency fund. Trouble is they haven't sufficient slack in their income .v. expenditure account each week to save anything. So, they borrow money! To endow the fund. Naturally, after a few months, their creditors are banging on the door and, instead of just the spendthrifts going bankrupt, they all do! One wonders for how long the locomotive economies of the Eurozone, Germany, etc, are going to accept supporting the spendthrifts and over-taxing their citizens in order to do so: and compromising their citizen's savings and the forward value of their income and expenditure, simply in the cause of following an ideological dream? Link to comment Share on other sites More sharing options...
just john Posted October 30, 2010 Share Posted October 30, 2010 Exactly my analogy Gluey, trouble is Friends do keep lending them money, and crafty Chinese et al investing in the Euro to sustain the fantasy that it will be alright in a minute, so the end is still not in sight and I'm still confused as to how it can defy logic, meanwhile the Poor old pound suffers on the exchange. Link to comment Share on other sites More sharing options...
AnOther Posted October 30, 2010 Share Posted October 30, 2010 [quote user="just john "]In the Peloponnese region train drivers are paid up to 95,000 EUR a year, and very often run empty.Employees earn four times more in salaries than total ticket sales[/quote]I found that unbelievable until I found this:'Hellenic Railways wins my award for the most preposterousorganisation of the year. It loses roughly EUR1bn annually on revenuesof just EUR200m. That's right - its yearly deficit is five times itsturnover. It carries a vast debt load of EUR10bn - or 5% of Greece'sGDP - because misguided foreign investors believed the Greek governmentwould never permit it to fail - and the EU would never permit Greece tofail.The rail business is effectively a demented job scheme, where theaverage salary is more than EUR60,000, with train drivers earning twicethat. During the past decade, the company's labour costs have risen by50%, even though staff numbers have shrunk by 30%. This is theconsequence of permitting a profligate nation to 'borrow' the bankguarantee of a disciplined one. A little like lending money to animpoverished aristocrat with a gambling addiction and assuming that hisrich relatives will always bail him out.Despite billions of euros invested in recent years and a massiveoperating subsidy, Hellenic Railways remains inefficient anduncompetitive compared to road transport. It is a union fiefdom thatmust eventually undergo profound structural reform - just like theundemocratic EU itself. And the sooner that painful but necessarychange comes, the better for the citizens of Europe.'Source Link to comment Share on other sites More sharing options...
Gluestick Posted October 30, 2010 Share Posted October 30, 2010 There is, of course, a hugely hidden dynamic here, AnO.All apart from emergent Eurozone states abusing their new found status as members of the Euro club to borrow vast and unaffordable capital sums on the Sovereign Risk market - mainly since the lenders believed the obligors were a good bet as they would be supported totally by the big boys in cases of default - they additionally qualified for huge grants and subsidies from the various EU dedicated funds.Which is precisely why member states such as Britain are expected to contribute such vast sums each year.Thus in simple capital value terms, it's a Double Whammy.And this significant and serious weakness will eventually be the causal factor which creates strain breaks in the whole stupid edifice.I always consider such things on a simple corporate basis: if Company A is in fine shape, has an excellent balance sheet, rapidly increasing revenues, good profit margins and superb track record in market penetration; plus excellent product offering and is future-proofed by new product lines constantly in development, would it really "merge" with an outfit, Company B, which is on the edge of insolvency, has a stale product offering which is difficult to sell, huge over-leveraged capital position (i.e. too many debts) etc, etc?Of course not: A might well consider buying B for pennies on the pound: but a merger?Nawh!However, this is precisely what the EU has done, with its grandiose ideas of rapidly expanding its spavined ideology of a Federal Europe.It has saddled the good guys with a series of three legged horses and expects to compete in the grand National. Link to comment Share on other sites More sharing options...
mint Posted October 30, 2010 Share Posted October 30, 2010 So how come the pound languishes at 1.14? Link to comment Share on other sites More sharing options...
Gluestick Posted October 30, 2010 Share Posted October 30, 2010 [quote user="sweet 17"]So how come the pound languishes at 1.14?[/quote]Simply, Sweets, 'cos global capital markets and particularly, the Sovereign Risk market (The major players and funds and institutions which lend to nation states), have a very jaundiced eye in terms of Britain's dysfunctional budgetary deficit and the potential for bringing it back into balance, Britain's awesome public debt, Britain's unfunded pension liabilities, Current Account continuing deficit (Balance of Payments), lack of significant competitive Wealth Creational acitivities; and so on.Short term, the very low rates of interest for sterling impact seriously on forex (Foreign Exchange) values too.The repeated negative metrics issued by Mervyn King don't help much, either!Forex values tend to comprise two constituents: short-term speculators seeking quick capital gains: and stable economies adding foundation to any fiat currency's core value.A fiat currency is simply one with no real asset backing (Such as bullion): it's inherent value is mainly based on the stability and forward view of an underlying economy: If you like, a fiat currency is a share certificate in the issuing country.Would you buy shares in Great Britain PLC right now?[Www] Link to comment Share on other sites More sharing options...
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