Postby eureka » 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.