Sterling hits record new Euro low - BBC

WTF?_2

And more importantly against a basket of currencies too....

http://news.bbc.co.uk/1/hi/business/7775191.stm

The British pound has fallen to a new record low against the euro amid a grim outlook for the UK economy.
At one point, sterling declined to under 1.14 euros. It also touched a new low against a basket of currencies.
Interest rates have been cut both in the UK and in the eurozone, but they remain higher in the 15-member euro currency area.
The pound was also hit by new data suggesting the UK economy had shrunk by 1% in the three months to November.
The pound stood at $1.4807 and at 1.1450 euros in London late morning trading.

Strategic devaluation or crumbling currency in the face an economy that's even more off the rails than the competition?

I know which one I think it is.

Cannon_Fodder

I was going to post that, but I think its fair to say this will not be the last record low...

...shall we take it in turns each week??

ad9898_3

The government don't know what the word strategic means, as they act on what has happened rather than what may happen.

So I know which one it is as well.

WTF?_2

I think there's a good chance of recovery against the Euro as I really can't see what has held the Euro up for so long, it has lots of fault lines in it.

Seems that the 'big' currencies are holding up as the bigger the economic bloc issuing the currency, the better your chances of getting something back for any cash/bonds you hold in that currency. There's a lot more GDP behind the dollar and Euro than there is behind the pound.


Also, 3 month US treasuries briefly went negative so people were paying the US government for the privilege of lending their money to them. Shows how worried they are when I'm sure a cash-strapped bank would give them a decent rate of interest.

http://www.ft.com/cms/s/0/c0c68a98-c646-11dd-a741-000077b07658.html

Nervous investors on Tuesday paid for the privilege of owning US government debt, pushing interest rates on three-month Treasury bills to negative levels for the first time in postwar history.
The implied yield for three-month bills briefly traded at negative 0.01 per cent – the first time that has happened since 1940, traders said. At such a level, an investor is essentially paying someone to own the security.

The flight to safety helped the Treasury sell $30bn in four-week bills at a discount rate of zero per cent for the first time. That auction followed the sale of $27bn in three-month bills at a discount rate of 0.005 per cent on Monday.
Ted Wieseman, economist at Morgan Stanley, said that “demand for cash remained extreme” and described the result of the four-week sale as “absurd”.

I,_Brian

!!!!!!? wrote: »

I think there's a good chance of recovery against the Euro as I really can't see what has held the Euro up for so long, it has lots of fault lines in it.

But not as many as the GBP.

The Eurozone may be sliding to recession, but it's a more robust currency than the GBP - our financial services sector has withered, our property market is one of the world's biggest bubbles, there's no incentive to save, the death of mortgage trackers and continuing high energy bills means there's little to spend as well.

Well done Gordon and the Bank of England for your crowning achievement!!

ad9898_3

I,_Brian wrote: »

But not as many as the GBP.

The Eurozone may be sliding to recession, but it's a more robust currency than the GBP - our financial services sector has withered, our property market is one of the world's biggest bubbles, there's no incentive to save, the death of mortgage trackers and continuing high energy bills means there's little to spend as well.

Well done Gordon and the Bank of England for your crowning achievement!!

I'm not sure about that, I think the Euro will be on the rack soon, if Italy defaults, the Euro will become the new toilet paper. One currency with a whole host of different countries with different needs in a downturn won't work, as I'm sure we will see.

BlondeHeadOn

I have a load of Euros to change back to sterling (unspent holiday money), and every day I think "Now's the time I'll do it to get the best exchange rate" - and every day I decide to wait a little bit longer as the pound slides a bit further...

Go on someone, give me a prediction as to the best date to change my Euros back to pounds...

davetrousers

BlondeHeadOn wrote: »

I have a load of Euros to change back to sterling (unspent holiday money), and every day I think "Now's the time I'll do it to get the best exchange rate" - and every day I decide to wait a little bit longer as the pound slides a bit further...

Buy back rates will be hugely different from selling rates. Best hold on to them and use them on your next European jaunt.

I've still got euro travellers cheques that I bought at 1.434

Walletwatch

I am surprised somebody has not yet considered doing a Soros like the early 1990's times!!!

tomstickland

BlondeHeadOn wrote: »

I have a load of Euros to change back to sterling (unspent holiday money), and every day I think "Now's the time I'll do it to get the best exchange rate" - and every day I decide to wait a little bit longer as the pound slides a bit further...

Go on someone, give me a prediction as to the best date to change my Euros back to pounds...

I've got the opposite problem: I'm going to France in the new year.

WTF?_2

Walletwatch wrote: »

I am surprised somebody has not yet considered doing a Soros like the early 1990's times!!!

There's no obvious target that you know the government will work to maintain. Soros short sold against the government's commitment to keep the pound in a given band against the Deutschmark. Once their resolve broke, he gained big.