How far will Sterling be allowed to fall?

GDB2222

My recollection, from when I was a child, was $5=£1.

Really2

Datasafe wrote: »

So now you are saying the Euro is overpriced?

Am I? I must of missed where I wrote that.:rolleyes:

It is certainly stronger against the £ than ever before but I cant remember saying it was overpriced.

It is a safer haven than most at the moment. Will it last, most probably not.

Really2

GDB2222 wrote: »

My recollection, from when I was a child, was $5=£1.

Was that pre metric?(decimalisation)

purch

It's not like this forum to get sidetracked off the actual OP :rolleyes:

Anyway in the last 25 years GBP/USD has been below 1.60 far more than it has been above 1.90 !!

And yes, the EUR is currently overvalued.

Datasafe_2

Really2 wrote: »

Am I? I must of missed where I wrote that.:rolleyes:

It is certainly stronger against the £ than ever before but I cant remember saying it was overpriced.

It is a safer haven than most at the moment. Will it last, most probably not.

You did in so many words, but I would agree with that. The Dollar is toast and the pound is going the same way. You are right in saying the Euro is a safe haven ATM.

Really2

Datasafe wrote: »

You did in so many words, but I would agree with that. The Dollar is toast and the pound is going the same way. You are right in saying the Euro is a safe haven ATM.

Not a bad day today though
http://newsvote.bbc.co.uk/1/shared/fds/hi/business/market_data/currency/default.stm
Up against the whole basket.

buglawton

Can anyone shed light on the ludicrously high valuation of the Yen then?

mewbie_2

buglawton wrote: »

Can anyone shed light on the ludicrously high valuation of the Yen then?

I'm going to take a long shot here, probably come unstuck. Is it to do with the carry trade?

Do NOT ask me any questions on this as I do not know. Something to do with housewives and low interest rates I believe.

How cool is that? On topic, possibly knowledgeable and no silly joke to cover up lack of insight. My work here is done for tonight.

aqueoushumour01

Really2 wrote: »

We are in "historical norms" the £ was overvalued and you know it. $2 to the £ is not historicaly normal.
It is hovering around $1.5 for the last month which is around the historical average.

Do you think the £ should be worth $2 and never change?

true, according to purchasing parity we're not far below the 'correct' rate. same goes for the euro too (although euro is overvalued), although still a shock that sterling has depreciated by about 25% against the dollar and euro in so little time - especially the latter.

aqueoushumour01

buglawton wrote: »

Can anyone shed light on the ludicrously high valuation of the Yen then?

mewbie wrote: »

I'm going to take a long shot here, probably come unstuck. Is it to do with the carry trade?

Do NOT ask me any questions on this as I do not know. Something to do with housewives and low interest rates I believe.

How cool is that? On topic, possibly knowledgeable and no silly joke to cover up lack of insight. My work here is done for tonight.

well, it's actually the carry trade in reverse. Typcially it is possible to make money by borrowing in traditionally low interest rate currencies (yen, dollar to a certain extent) and then invest in higher interest rate currencies (e.g. sterling.) However, currencies have been going against this trade with 'safe-haven' currencies being bought up like no tomorrow. That's why the yen has appeciated so much over the past 12 months against sterling.