The Pound Sinks Further

Spiv_2

Trading at $1.4772.

The markets obviously don't think much of this new government.

inspector_monkfish

Spiv wrote: »

Trading at $1.4772.

The markets obviously don't think much of this new government.

Its King's comments the market doesn't like.
Nothing to do with the new govt.

inspector_monkfish

09:41 13May10 GBP/USD: Weighed Down by Larger-Than-Expected UK Trade Deficit

LONDON,May 13

Cable has fallen by more than a quarter-cent to a 2-day low of 1.4798 on the back of March"s much larger-than-expected UK trade deficit. This ballooned to GBP 7.522bn, from an upwardly revised GBP 6.305bn in February. A more modest increase to GBP 6.4bn was forecast.

A good size sell order from a US name was flagged as a factor in sterling"s
earlier three-quarter cent drop from an intra-day high of 1.4917, ahead of the 08:30GMT UK trade data.

---

09:32 13May10-STERLING <GBP=> FALLS TO DAY'S LOW VS DOLLAR AFTER UK TRADE DEFICIT WIDENS

LONDON, May 13 - Sterling fell to the day's lows against the dollar on Thursday after data showed Britain's trade deficit in March widened more than expected.

Britain's goods trade deficit with the rest of the world widened to 7.522 billion pounds in March from February's 6.305 billion pounds, after exports held broadly steady at 21.437 billion pounds but imports rose to 28.959 billion pounds from 27.532 billion.

Sterling dipped to a session low of $1.4798
Some traders also cited pound-selling against the Swiss franc as contributing to sterling's decline.

Spiv_2

inspector_monkfish wrote: »

Its King's comments the market doesn't like.
Nothing to do with the new govt.

Down to 1.471 now.

Simply pointing out that there has been no relief rally from new the conservative government.

If you want to get all defensive that's fine too.:)

inspector_monkfish

Spiv wrote: »

Down to 1.471 now.

Simply pointing out that there has been no relief rally from new the conservative government.

If you want to get all defensive that's fine too.:)

its not a matter of getting defensive dude, its just fact.

there was a relief rally yesterday morning after Cameron & Clegg were announced, then at 9.30 the BOE inflation report came out. Its been a downward spiral ever since !

1.4695 trading


See here......


17:36 12May10 - Mervyn King: Party Pooper



Mervyn King, Governor of the Bank of England, has spoiled sterling's party faster than a grumpy dad turning up at a secret teenage booze-up.

The currency shot higher as soon as David Cameron set foot in 10 Downing Street and his party--the Tories--sealed a power-sharing alliance with the Liberal Democrats.

It was a big relief, after the somewhat scary risk seen earlier this week that the U.K. could end up with a highly unstable rainbow coalition dogged by stubborn special-interest groups.

Cue a 2% leap in the pound from its low point Tuesday, pushing it to a peak of $1.5045 against the dollar.

Then the Bank of England started its quarterly inflation report, with some dour messages from King.

First off, inflation looks set to be lower for longer than many investors had expected--a factor that keeps currency-supporting interest rates low.

In addition, King was very grim-faced in his wake-up call over the risk of a sovereign debt crisis in the U.K. It's a very clear risk, and one that can be quashed only by pretty brutal spending cuts, he suggested.

He wasn't entirely gloomy, stressing strongly that he welcomes the
budget-slashing plans that he has seen from the new coalition so far.

And he's absolutely right, of course. Still, this party-pooping sent the
pound tumbling back down to the $1.49 area.

The point is that the U.K. has a new government, but old problems. It's not exactly staring down the barrel of a Greece-style rout, as its debt profile is somewhat different to Greece's, and the U.K. enjoys the ability to let its currency drop far enough to boost exports and get the country out of a hole.

Still, complacency at this point would be daft. That makes it tough for
investors to hurl themselves into U.K. assets before the new government has laid out its emergency budget, which it intends to do within 50 days. Even more importantly, investors want to see what the ratings agencies think.

It might be a good idea to keep the champagne on ice.

Generali

Just to make the point, the value of the quid vis-a-vis the dollar isn't a vote by the markets on the competency of the current or any possible future Government, it's a part of a very complex series of calculations, most of which are individually very simple as to what currency you need or want to hold at any given time for a multitude of purposes.

Spiv_2

inspector_monkfish wrote: »

its not a matter of getting defensive dude, its just fact.

there was a relief rally yesterday morning after Cameron & Clegg were announced, then at 9.30 the BOE inflation report came out. Its been a downward spiral ever since !

1.4690 trading

Blinked and you missed it!?

Spiv_2

All the "attack dogs" on this board are becoming very sensitive!:)

Spiv_2

Generali wrote: »

Just to make the point, the value of the quid vis-a-vis the dollar isn't a vote by the markets on the competency of the current or any possible future Government, it's a part of a very complex series of calculations, most of which are individually very simple as to what currency you need or want to hold at any given time for a multitude of purposes.

LOL - really I never knew that:)

Generali

Spiv wrote: »

All the "attack dogs" on this board are becoming very sensitive!:)

!!!!!! is an "attack dog" please? It's not a phrase I've come across before outside of war movies.

inspector_monkfish

Spiv wrote: »

All the "attack dogs" on this board are becoming very sensitive!:)

matey, whats up ?
i'm not attacking you
i work in the markets, and i'm just explaining to you how yesterday morning Cable trading happened, before and after the BOE inflation report.
thats all