Sterling Vs Euro

Discussion in 'The Intelligence Cell' started by DesktopCommando, Oct 13, 2010.

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  1. What the hell is going on now, been watching it all week now at 1.13853 from going steadly down the pan, at this rate we will below the 1:1 rate before Christmas

    Can someone explain what is going wrong, since some of the PIIGS where starting to buckle last week ?
  2. Interest rates for Sterling will remain low for several months, thus money markets want to invest in higher interest loans. Add the scares of a double-dip recession in the UK, falling house prices, reduced lending to companies and all is not rosy.

    Personally I would love it if Sterling went to 0.5EUR...

    ...but then I'm paid in Euros!
  3. Anything to do with the fact we have a zero growth forecast for this quarter? Morale is low...
  4. Alsacien

    Alsacien LE Moderator

    I noticed the financial wizards forecasting Euro doom this year have been rather quiet of late. ;-)

    Why do you think something has gone wrong? Markets go up and down - but they are always right. At the end of the day Ireland and Greece are just a tiny fraction of the European economy, and folks need to be objective when comparing news headlines.

    I said a few months back that if Sterling reached 1.25 I would cash in Sterling assets for Euros - it did'nt make it, peaking at just below 1.24 so I still have too much in Sterling right now. Nobody (except a couple of mongs on here) thought it had the legs to really creep up in value into the 30's - especially with more stimulus to be gained by keeping it low.
    But I did not expect to see a sustained drop below the high teens.
    I think the Euro will be dropping again before year end - but now there are question marks against the $ and Sterling, so you need to watch other indicators. The obvious CHF and Yen are also on a weird curve, so you could give yourself a headache quite easily.
    Sterling is for sure 20% undervalued against the Euro - but as to exactly when it will make that up is anyones guess, and it certainly will not be linear as everyone is too jumpy.