£ strongest major currency in the world in 2009

gozomark

In Jan this year, there were many people posting here that the pound was about to go into freefall (go to parity and alot lower v €, even go to parity v $), which felt like pure panic had set in.


Since then its up 10-30% from the Jan lows against €, US$, yen.

Did any of you act on your fears, and if so, did you use a stop loss to cut your losses ?

nrsql

or do you think you are now waiting out a bubble?

gozomark

I think 1.30 v € is likely to be the long term average going forward - 1.50 was too high, 1.05 too low. I've held the view on 1.30 as equilibrium rate for many years, and continue to hold it. Its also the likely rate UK would join € (if it ever did)

DiggerUK

Gozomark,
The rise in value of the pound has been frustrating for us who are invested in gold.
The reason is simple, as pound strengthens the price of gold (pog) in UK falls.
What has happened is that rises in $pog have left gold around the 600 mark in UK, when of course we wanted drops to make it a better deal to buy, but the hoped for dip in GBPpog hasn't happened. C'est la vie.

Why the pound has strengthened seems to be a reflection of the weakness in the dollar surfacing.
This seems evidenced by their difficulties in recent sales of US Treasuries. Like the UK sales recently of bonds, they just managed to get them sold.

The other thing to bear in mind is that the pound was getting $2 a year ago, so a rise from under $1.40 to $1.65 is no big deal.
Most of those who follow charts and waves say it could go nearer $1.70, but I'm not an adherent of the chartists, so can't comment.

One things for sure, bailouts and QE will only debase currencies further.

To anybody tempted, this is a thread about currency exchange, not gold.

As puzzled as anyone.

inspector_monkfish

DJ MARKET TALK: Where GBP/USD Setbacks Could Occur

0851 GMT - The GBP/USD charts suggest a test of the 50% Fibonacci retracement target of 1.7329 before a bigger setback occurs says RBS.

Closer to home a break below hourly trendline support at 1.6481 would signal a loss of upside momentum, but only below 1.62 would call for a deeper setback toward 1.5792 [38.2% Fibonacci level. RBS says as long as this level is defended, the overall uptrend remains intact. GBP/USD now at 1.6567. (GST)

gozomark

a move from 1.40 to 1.65 represents a 50% recovery of the fall from 2.00, so a I'd say is a big deal

£ fell 43% - ie from 0.5 $ to the £, to 0.71 $ to the £
its now 0.61 $ to the £

One things for sure, bailouts and QE will only debase currencies further. - not against each other....

its phrases like "One things for sure" that lead to the panic in January - how many posts said something like "the pound is bound to go to parity" ? When I and a few others pointed out nothing is certain, the replies came back "because the experts say so" - well, the more people believe something is bound to happen, the less likely it is

gozomark

DiggerUK wrote: »

As puzzled as anyone.

what puzzles me is not the recovery, but how on earth it got down to close to parity in the first place

nrsql

Not sure the $ is a good measure of a currencies strength at the moment.

No idea what will happen suspect there has been a bit of dead cat about this year.
Everythings still very volatile.

purch

When I and a few others pointed out nothing is certain, the replies came back "because the experts say so"

Actually I think the replies were far more in the way of 'attacking' anyone who dared disagree as being totally out of touch.

It was pretty clear 6 months ago that the ECB was well behind the curve in it's response to the looming recession.

gozomark

nrsql wrote: »

Not sure the $ is a good measure of a currencies strength at the moment..

hence the title to the thread - its not just against the $ - its up 14% v € and 30% v yen from the lows - this is £ strength, not $ weakness

DiggerUK

Gozomark,
Currency debasement has never served any good.
The history of evidence from Rome to Zimbabwe is for me the argument that supports my claim.

This as you rightly say does not devalue one against the other as a matter of course.
But it does seem that as most governments are debasing their currencies by these methods, currency exchange rates seems to be a case of devalued currency versus even more devalued currency.