£ recovers to 1.095 v € : edit now 1.113

gozomark

the "biggest one-day rise against the single currency in nine years" yesterday was 2.7% - that record might only last a day, as its currently up 2.6% today, at 1.106

purch

I've a feeling it went below that intra day in 1984, and that 1.0504 was the daily close low

1.0508 was the all time low trade on GBP/USD

Happened around about 11:20 (just before lunch) and it was immediately 35 paid and bid.

Marshalls (the broker) never let on who it was who sold at 08, but the general consensus was that it was Barclays (sounded like him anyway)

On the EUR, looking at the price action during the move down, and then the subsquent bounce, I would think if it can stay above 1.10 for a few days then we can say that we have seen the near term low.

gozomark

thanks for that - I didn't start working in the markets until 87, but remember the 85 low while at University - it wouldn't surprise me to see a 50% pull back from the recent move - currently would mean down to 1.06 odd, but as long as we see rising lows and rising highs, I agree.

sabretoothtigger

Isnt it a bit weird that the currency recovers ahead of an expected drop in rates, is ecb going to drop them even more. I guess we are competing vs 0% in usd

gozomark

expected interest rate changes have a very minor influence on exchange rates, as they are discounted. What caused the rise in £ v € was

1. Euroland inflation dropping below 2% (announced today)
2. £ being very oversold, and so many people being bearish on it

gozomark

1.11 currently

anyone still running long € v £ positions ?
if anyone took profits, are you looking to put the trade on again ?

Myrmidon_J

gozomark wrote: »

the 6 months before, and 1 month after bottoming in 1985

http://fx.sauder.ubc.ca/cgi/fxplot?b=GBP&c=USD&rd=*&fd=1&fm=9&fy=1984&ld=31&lm=3&ly=1985&y=daily&q=volume&f=png&a=lin&m=0&x

and the last 3 months of £ €

http://fx.sauder.ubc.ca/cgi/fxplot?b=GBP&c=EUR&rd=*&fd=1&fm=10&fy=2008&ld=28&lm=2&ly=2009&y=daily&q=volume&f=png&a=lin&m=0&x

Just thought I'd point out - although you are obviously aware - the scale on the second graph matches the first three months of the former...

High to low, then spike; then another massive fall. If you are looking for patterns, try matching the second to the first on a relevant timescale!

(For my money, I thought the £ overshot the mark somewhat and was due a rebound. But I place little faith in predictions or models - even my own (!!) - at this moment in time.)

gozomark

One could argue that timescales are squashed compared to the 1980's with the much freer flow of information. However, its not the timescale that really matters to my mind, but the way it bounced just before parity, and how almost everyone just assumed it would go to, and through, parity.

Actully if you are right, then it goes to 1.25-odd anyway, before another massive fall

uk_music_lover

1st rung of recovery.. me thinks :lipsrseal

gozomark

1.12 just after rate cut

anyone still running long € v £ positions ?
if anyone took profits, are you looking to put the trade on again ?
the £ bears have gone very quiet