Pound v Euro

Fiddlestick

We're off to Italy in a few weeks on holiday.

1.2 Euro to the Pound works for me

pqrdef

Degenerate wrote: »

Purchasing Power Parity is not an opinion, it's a measurable statistic:

But if I want to buy UK Treasury gilts, I'll need to acquire sterling, and if I want to buy Greek government bonds, I'll need to acquire euros. So to measure the relative purchasing power of the sterling and the euros, I'll need some way to compare the absolute value of the UK bonds and the Greek bonds. How am I going to do that?

Degenerate

pqrdef wrote: »

But if I want to buy UK Treasury gilts, I'll need to acquire sterling, and if I want to buy Greek government bonds, I'll need to acquire euros. So to measure the relative purchasing power of the sterling and the euros, I'll need some way to compare the absolute value of the UK bonds and the Greek bonds. How am I going to do that?

That's not the issue I was addressing.

sims01

Degenerate wrote: »

You can define the "trend" in any direction you want if you base your conclusion on two arbitrary points in time like you just did. If one studies the actual trend, it clearly was slowly appreciating from mid 2004 (where my data starts) until mid 2007, heavily depreciated from then until early 2009, then began to slowly appreciate again.

Over the longer term, it is undeniable that GBP has had a downward trend towards most hard currencies (e.g. CHF, formerly DEM and now replaced by EUR).Since the departure from the gold standard, Sterling has lost ~80% versus CHF for example.

Usually during economic booms, GBP tends to appreciate, but it tends to sharply devaluate whenever there is a crisis, leading to an overall downward trend.

Even today, inflation in the UK is consistently running about 1% higher than in the Eurozone.

pqrdef

Degenerate wrote: »

That's not the issue I was addressing.

But measuring purchasing power is pretty meaningless if you aren't including the stuff that people are actually purchasing. The national debt is one of our bigger exports.

missile

Degenerate wrote: »

You can define the "trend" in any direction you want if you base your conclusion on two arbitrary points in time like you just did. If one studies the actual trend, it clearly was slowly appreciating from mid 2004 (where my data starts) until mid 2007, heavily depreciated from then until early 2009, then began to slowly appreciate again. I have been trading foreign currency a lot longer than you have been playing school boy economics

You seem rather confused, if one knew the pound was going to get weaker it would make sense to buy euros, not sell. I was taking the pizza, you did notice the :rotfl:

Purchasing Power Parity is not an opinion, it's a measurable statistic: http://stats.oecd.org/Index.aspx?datasetcode=SNA_TABLE4
And I will correct myself, after years of under-valuation it appears that it finally tipped into positive territory within the last couple of weeks. Most recent PPP data suggests fair valuation around £1 = €1.21.If only it was so easy

Gee, thanks for sharing. :rotfl:

Degenerate

sims01 wrote: »

Over the longer term, it is undeniable that GBP has had a downward trend towards most hard currencies (e.g. CHF, formerly DEM and now replaced by EUR).Since the departure from the gold standard, Sterling has lost ~80% versus CHF for example.

Why are you looking at such a short-term trend? Surely it's more useful to go back to the English Civil war, or the signing of the Magna Carta.

Degenerate

missile wrote: »

I have been trading foreign currency a lot longer than you have been playing school boy economics

Really? Well you sounded a bit clueless for such an experienced currency trader:

missile wrote: »

The falling Euro is causing me increasing stress. I have significant savings in euros and I am a bit alarmed and have no idea what I should do?

oldvicar

@ degenerate
@ missile

CALM DOWN DEARS.

Play nicely girls, or mommy will have to take your dollies away.

missile

Degenerate wrote: »

Really? Well you sounded a bit clueless for such an experienced currency trader:

The value of the pound v euro has fallen since the introduction of the euro. It is down from 1.49 when YOUR data starts in 2004.
Seems I know a little more than you :rotfl: