US ($) Currency Thread 2

inspector_monkfish

14:44 21Feb11 - Speculators Ratchet Up Positive Bets On Sterling Outlook

--Speculative investors pile into positive bets on the pound
--CFTC data show long positions highest since November 2007
--All eyes on Wednesday's BOE MPC minutes

LONDON--Speculative investors have been slapping positive bets on
the outlook for sterling recently, with weekly Commitments of Traders data
released Friday by the Commodity Futures Trading Commission showing that long
positions are now at their highest since November 2007.

"Rising rate-hike expectations are clearly behind the move, though it's worth
noting that the positioning snapshot was taken the day before Bank of England
Governor Mervyn King's relatively dovish performance at the Inflation Report
press conference," said Gareth Berry, a currency strategist at UBS in Singapore.

In the week ending Feb. 15, traders almost doubled their positive bets on
sterling, UBS said, noting that it was "one of the biggest one-week shifts in
sterling sentiment ever recorded."

With U.K. inflation now running at double the target rate, pressure on the
Bank of England to take action and raise interest rates is growing, which in turn
has supported sterling.

Even King signaled for the first time last Tuesday that the Monetary Policy
Committee could start to raise its key interest rate soon, although at a gradual
pace.

Despite King's somewhat more hawkish tone, Wednesday's quarterly BOE
Inflation Report disappointed the market and investors may have trimmed some of
their long positions as a result, UBS said.

But it won't be long before investors resume their positive bets on the
pound, said UBS, highlighting this Wednesday's publication of the latest BOE
minutes.

Kasper Kirkegaard, a senior analyst at Danske Bank, agreed. "The Inflation
Report was less hawkish than expected, which might have led to some position
unwinding," he said. "However, the market was probably still fairly long sterling
going into this week."

To be sure, the CFTC figures represent only a small slice of the
foreign-exchange market and do come with a time lag.. But they are used as a
proxy for market sentiment towards currencies based on the direction and volume
of bets.

So far, the Bank of Canada is the only central bank from one of the Group of
Seven leading economies to have raised its key interest rate and because the BOE
looks increasingly likely to be the second, market participants are becoming
increasingly bullish about sterling's outlook.

The breakdown of the latest Monetary Policy Committee vote will be made
public this week, which may give further clues as to whether a rate rise is on
the way.

"The discussion of the actual policy decision may be newsworthy," said
economists at the Royal Bank of Scotland. "Certainly, the text in last month's
minutes, which revealed that several committee members thought the policy
decision was finely balanced and were effectively put off by the fear of spooking
the market, moved rate expectations."

In January, Andrew Sentance and Martin Weale voted for a rise in interest
rates from the current record low of 0.5%, while Adam Posen voted for an
expansion in the BOE's bond-buying program.

But there appear to be growing divisions among the nine-member MPC.
"There is a great deal of uncertainty about the medium-term outlook for
inflation," King wrote in a letter to Chancellor of the Exchequer George Osborne
last week, explaining why inflation was running above the BOE's target level.

"I do not wish to conceal that there are real differences of view within the
committee," he said in his letter.

Since the start of the year, the pound has notched up hefty gains against the
dollar, climbing by almost 4%.

At 1230 GMT, the pound was trading at $1.6221 against the dollar compared
with $1.6248 late Friday in New York.

---

right now, trading at 1.6140

pollypenny

Good to see you back, Inspector!

You've been missed.

jackieblack

inspector_monkfish wrote: »

lol
not looked on here for ages.... i see nothing has changed

Welcome back!
No not much changed...... same old, same old.... and the exchange rate is still rubbish (but not quite as rubbish as it has been! )

bb69

1.61 for anyone in the Waterloo area or willing to travel to Waterloo

http://travelmoney.moneysavingexpert.com/holiday-money/#results

bb69

1.62 via the money checker!

Wooo Hooooo!

sabretoothtigger

Sterling Index At 0800 GMT
 
      (JAN 2005=100)     INDEX      GBP/USD     EUR/GBP 
     PREVIOUS CLOSE      80.9       1.6264      0.8602 
               OPEN      80.9       1.6257      0.8594 
              10 AM 
               NOON 
               2 PM 
               4 PM 
 

March 07, 2011 03:01 ET (08:01 GMT)

jackieblack

Doesn't seem to be much happening with the $ rate as far as I can see, but found this thread languishing on page 5(!) so I thought I'd have
"Have a lovely weekend" to you all, and bump it back up to page 1 while I was at it!

bb69

Ah you too Jackieblack..I was distraught (ok a bit melodramatic lol) when I saw the rate had dipped slightly.. Need to make up my mind when to but some more.

Have a fab weekend

neilbond007

Rate has been bobbing around quite a bit this week. Up 2c one day and back down the next. Up to 1.6234 at end of play today. Can't be bad.

Have a good weekend all. I'm off to Phoenix tomorrow! Been 33C there this week. Back to 21C with wind and rain on Monday
3 days of golf and baseball before a couple of days work.

12 weeks and counting for junior to arrive...

bb69

Safe trip and have a great time! 12 weeks will fly by too!