Sterling rallies after rate cut

barrooo

Its going to be interesting today as well, with non farm payrolls and unemployment rate, coming out for the US.
Both are predicted to be dire, and it'll be interesting to see if last months figures are revised

Really2

Wookster wrote: »

No one knows what currency is the bigger pile of pooh.

True but I also wrote this yesterday (bigging myself up today:))

Really2 wrote: »

The money markets like to know we are acknowladging our situation and are taking action.

Look what they did in europe today. That went down like a lead ballon.

purch

it'll be interesting to see if last months figures are revised

They will be............and it'll still be a wild stab in the dark !!!!!!

Conflict

Key with todays official figures is ADP revised there figures UP for December, i.e. less people unemployed, so the official figures may do the same - also pigs might fly over the White House as well.

barrooo

purch wrote: »

They will be............and it'll still be a wild stab in the dark !!!!!!

Too true, I'm just listening to CNBC at the mo, and the range of predictions makes me laugh

WTF?_2

Rochdale_Pioneers wrote: »

I posted this yesterday - the pound went up like a rocket when the rate cut went through.

The facts are simple - the Eurozone is just as screwed as we are with less room to manuever. The press here pay no attention to the crashing economies in Europe, to their bank bailouts and fiscal stimuli, but the markets do. There is no hiding place for traders, no safe haven they can park all their money in to ride this out. Sterling took a hammering because the UK economy was talked down like we were uniquely in trouble. Now they see we're not and its swinging back.

OK so we're all screwed is probably a worse position globally than its just Britain. But it does explain the stampede-like currency swings of recent months.

Actually, it's being reported that the rise is in large part because the BoE didn't seem to be rushing into money printing right now and the markets believe rate cutting will still be used for a while at least:

http://www.ft.com/cms/s/0/551e91a8-f36b-11dd-9c4b-0000779fd2ac.html

Sterling also found support because investors had been expecting more details from the central bank about its possible adoption of alternative stimulus measures through its asset purchase facility.David Powell of Bank of America said the implementation of a more aggressive quantitative easing policy would probably first require bringing UK interest rates to zero but the market was currently pricing in a trough in rates of just 0.75 per cent.

Though I wouldn't disagree that the Eurozone and USA have problems too. The Dollar should be toilet paper by now but its unique position has saved it and goodness knows why the Euro hasn't yet taken a hammering.

WTF?_2

Wookster wrote: »

No one knows what currency is the bigger pile of pooh.

Absolutely, it's a crapshoot amongst Dollar, Sterling and Euro but I still reckon that Sterling is most screwed, unless the Euro actually implodes of course.

Generali

!!!!!!? wrote: »

Absolutely, it's a crapshoot amongst Dollar, Sterling and Euro but I still reckon that Sterling is most screwed, unless the Euro actually implodes of course.

My belief is that the EUR will blow up because of the political tension between the Germans and French and their differing attitudes to inflation.

Time will tell of course. Sterling is looking jolly vulnerable too.

As for the USD? Well that's looking rough too.

Gah!

Wookster

The US$ must devalue at some point - surely someone will start selling their US$ reserves to fund an internal restructuring program. That would be the end of the US$.

There is no safe haven is there...

WTF?_2

Wookster wrote: »

The US$ must devalue at some point - surely someone will start selling their US$ reserves to fund an internal restructuring program. That would be the end of the US$.

There is no safe haven is there...

Gold is a likely one. Though it's always risky thanks to speculation so you could end up buying in over the odds and then getting badly burned if the worst doesn't happen.

On the other hand, once the 'bond bubble' properly collapses (it's being showing signs of weakness recently) there might be a flight of cash into the yellow metal and investors could make themselves a lot of money.

Probably for the time being, for the individual, physical legal tender in a secure safety deposit box is the safest thing to hold. But be ready to move it into hard assets or a house (if that's what you wanted to buy in the first place), quickly.