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Is the pound set to make a comeback against the Euro?
Posted: Tue Apr 21, 2009 8:47 pm
I have recently read on a currency exchange website that the european bank is set to drop it's rate by 0.75% on May 9th from 1.25% to 0.5%(If I remember correctly as the article is no longer online). If so, am I right in saying that the pound will strengthen against the euro and by how much?
Posted: Tue Apr 21, 2009 9:00 pm
Some people have been predicting a comeback for the gbp for a while now but, it depends on the economy as well as interest rates. Keep your eye on the British budget tomorrow for an indication
Posted: Tue Apr 21, 2009 11:40 pm
I was at a conference the other week and a spokesman for American Express predicited the pound would strengthen against the Euro by summer as the recession hits Europe.
Since heard possible exchange rates of 1.20 - 1.28 by July 2009.
Posted: Wed Apr 22, 2009 12:01 am
I would love the pound to bounce back but I can't see how it can when we are printing money like it is going out of fashion... 'quantitative easing' I think they call it.
But you have got to hand it to Gordon he has halved everyone wages without so much as a whisper... that makes the Uk much more competitive. I did hear a rumour last year that he was going to link the pound to the Euro once they are neck and neck... only a rumour mind... and not so outlandish as apparently over 60% of the UK's trade is (was) with other EU countries.
We will just have to wait and watch...
Posted: Wed Apr 22, 2009 12:14 am
If Mr Gordon and Mr Darling Darling havent Bankrupt us by then I predict it will rise to the high twenties if they do drop interest rates in the euro zone. They (Brown & Co) will have to claw back billions from the taxpayers to pay for all they have spent on propping up the banks etc. Also I think if they do as promised and help the housing market to kick in it could even climb before the euro interest rate cut. The problem is that Germany is not suffering as much as the rest of the earo zone. We Brits need the recession to hit Germany as it has us but so far this hasnt happened. Spain, Greece and even Ireland are in a mess but the euro is strong because the German economy is propping it up.
Posted: Wed Apr 22, 2009 1:53 am
We've all been through this subject quite a bit over the last while.
I can only guess since I dropped my crystal ball and now there's a big crack right down the middle of it, so the previously perfect picture is somewhat hazy at the moment.
There is now way that I can see the ECB dropping interest rates by .75% in one fell swoop. A reduction of that magnitude would be totally unheard of. Really, it's not logical.
Since Sterling crashed against most currencies, and then to an all time low of virtual parity against the Euro around the start of the year, it has settled at around 1 EUR=£.90. To be honest, even though Sterling was on a downward spiral for quite some time, long before the current worldwide financial crisis, it surprised me because I really didn't think it would crash to such low levels.
Anyway, now that it has settled at EUR/£.90, I think it's going to hover around that level for the foreseeable future. I see no logical reason why this will change in the short to medium term. There is nothing on the horizon that I can see that will rally Sterling against the Euro, the Dollar or any other of the main currencies.
Unless of course there are financial indicators that suggest that the UK will lead the way out of this crisis ahead of the Eurozone countries, the USA, and indeed the rest of the economic world heavyweights.
Posted: Wed Apr 22, 2009 7:19 am
As UK interest rates fell, so did the Pound, as it became less attractive to Investors, the only way to rise against other currencies, is to raise interest rates
What is good for UK exporters is bad for ex-pats if their income is in Pounds.
If you look at todays rate Pound v Leva @ 2.20 is the Bulgarian Leva really getting stronger than the Pound? of course not, it's pegged to the Euro and gets dragged up with it, hurting Bulgarian exporters and us!
Posted: Wed Apr 22, 2009 9:09 am
as has already been pointed out the interest rates are only one factor that led to Sterling's declinem the state of the economy also has a huge bearing.
we are so far in ther mire I cannot see rates of €1.20 any time soon, but then I am not an expert.
Current "expert" thinking predicts sterling will be between €0.9 and €1.40 by the end of the year so that's around 35% margin of error
Posted: Wed Apr 22, 2009 10:10 am
A friend of mine who works for a a well known leading Merchant Bank in London who has so far correctly predicted from as far back as 2007:
a,UK house price crash.
b, Global recession
c,Exchange rate dropping Euro/GBP at close to parity.
He is saying 1.25 euro to GBP by end of June 2009 possibly 1.40 by end of year. Reason Eurozone finacial prediciment far worse than being admitted ie. Italy, Greece, Ireland and several others in deep financial crisis already breaking parameters for membership etc etc etc........ Also the difficulty of producing policies that will suit all the members different situations and requirements for survival and recovery. Also most multinationals operate in eurozone and losses being experienced subsidising exchange rate on imports into UK which is still a considerable market is hurting and hurting bad this on top of reduced demand for their manufactured products elsewhere.
sterling ouch ouch ouch
Posted: Wed Apr 22, 2009 11:39 am
As a person who deals with the Pound, Euro and BG lev
I can honestly say, I expect the Euro to be very weak against the Dollar and the Pound very weak against both the Euro and the Dollar after the Budget
The expect the Pound to stay well below the 1.18 point for the rest of the year and would expect to see sudden sharp falls here and there at any time as this is how the big money traders make their evil gains
The smart people got in on the lev as it is fixed against the Euro
anyone who relies on their pension being sent abroad is in for a bad time, I only hope they have lots of savings to help them over the next 2-3 years of expected bad times
While on the subject, anyone who is worried about where to put their money, if you have 10,000 Pounds or more, buy lump sum premium bonds and watch your money grow, it is the best bet for small time savers at the moment
guaranteed safety and you will make more than leaving it in the bank, the key to success is to buy in multiples of 10,000 blocks
BUY AS MANY AS YOU CAN AND SMILE