£terling and $ollar crashing against the €uro

[orangeman]

There she goes again. Sterling is f**ked.

€1 = £0.92
£1 = €1.09

Best to avoid Newry for the foreseeable I guess.

What's with the huge fluctuation ? Is the euro now the favoured currency ?

[Fear ón Srath Bán]

What's with the huge fluctuation ? Is the euro now the favoured currency ?

The Bank of England and Mervyn King om, who said during the week that a weak pound was good for UK exports, and that UK exports would be the primary vehicle for economic recovery, therefore Sterling interest rates aren't likely to rise any time soon, therefore the esteemed gamblers on the international money markets would be looking elsewhere for their quick, filthy, lucre.

[orangeman]

What's with the huge fluctuation ? Is the euro now the favoured currency ?

The Bank of England and Mervyn King om, who said during the week that a weak pound was good for UK exports, and that UK exports would be the primary vehicle for economic recovery, therefore Sterling interest rates aren't likely to rise any time soon, therefore the esteemed gamblers on the international money markets would be looking elsewhere for their quick, filthy, lucre.

At least the mortgage repayments will remain lower and this might in itself kick start a form of housing recovery ??

[Fear ón Srath Bán]

At least the mortgage repayments will remain lower and this might in itself kick start a form of housing recovery ??

Possibly, but then there's still so much raw debt out there that the various national 'stimulus' packages have camouflaged.

If consumer sentiment hasn't picked up and sustained itself by the time this 'Quantitative Easing' (printing of money) has run its course, it's hard to say. Hence the reason why the BoE want exports to lead the recovery -- it insulates them from taking any further measures, and from suffering any of the flak if their bribing of consumers fails.

[Donagh]

Pound Slides to Six-Month Low Against Euro; UBS Cuts Forecast

By Lukanyo Mnyanda

Oct. 13 (Bloomberg) -- The pound fell to the lowest level in more than six months against the euro after a business group said the Bank of England should expand its asset-purchase program and the inflation rate slowed more than forecast.

Sterling slid to 94 pence per euro for the first time since March 27 and reached the weakest level since May versus the dollar. Policy makers should extend their 175 billion-pound ($276 billion) bond-buying program by 25 billion pounds, the British Chambers of Commerce said. UBS AG cut its forecasts for the pound, citing the likelihood purchases will be expanded.

"What is staying in the market is the outlook for the Bank of England's November meeting and the potential increase in the debt-purchasing program," said Hans-Guenter Redeker, head of global currency strategy in London at BNP Paribas SA, France's largest bank. "Sterling is going to remain fairly weak. The U.K. economy is going to be lagging behind the global recovery."

The pound declined 0.5 percent to 93.98 pence per euro as of 12:10 p.m. in London, after depreciating to 94.10 pence, bringing its decline since Oct. 8 to 2 percent. Against the dollar, the pound was little changed at $1.5818, after earlier sliding to the lowest level since May 21.

Consumer prices last month rose 1.1 percent, down from 1.6 percent in August, the Office for National Statistics said today in London. That was lower than the 1.3 percent predicted in a Bloomberg survey of economists.

Nurturing Recovery

There is "still scope for some more" so-called quantitative easing, David Frost, director general of the BCC, said in a Bloomberg Television interview. The recovery needs "to be nurtured, so we're saying perhaps another 25 billion pounds," he said.

Prime Minister Gordon Brown said yesterday ending stimulus programs too soon could hamper the recovery. The government has to ensure "that your recovery isn't going to be derailed," Brown said in a Bloomberg Television interview.

Brown's comments suggest that "if the monetary policy committee was to request authorization for another extension to the quantitative-easing program from the Treasury, it would most likely get it," Gareth Berry, a currency strategist in Singapore at UBS, wrote in a report. "Fundamental news has re- asserted itself, weakening the pound."

UBS, which Euromoney Institutional Investor Plc ranks as the world's second-biggest currency trader, changed its one- month pound forecast against the euro to 94 pence from 89 pence, Berry wrote. Sterling will probably weaken to $1.54 in the period, compared with a previous estimate of $1.63, UBS said.

Housing, Retail Sales

The currency will end the year at $1.63 and 90 pence per euro, according to economists and strategists' forecasts compiled by Bloomberg.

Declines may be limited as some indicators show signs the economy is recovering after the central bank cut its benchmark lending rate to a record low of 0.5 percent and started buying assets to further depress borrowing costs.

The U.K. housing market strengthened in September as the proportion of surveyors and real-estate agents reporting higher prices rose to the highest since May 2007, the Royal Institution of Chartered Surveyors said today. A separate report from the British Retail Consortium showed sales at stores open at least a year rose 2.8 percent on an annual basis, the most in five months.

"The news that we've heard overnight from the U.K. has been pretty good so we might see some consolidation," said Vincent Chaigneau, London-based head of currency and fixed- income strategy at Societe Generale SA, who expects the pound to trade at 93 pence per euro by year-end.

Gilts Fall

Government bonds declined, pushing the yield on the two- year gilt 6 basis points higher to 0.78 percent. The 4.25 percent security due March 2011 fell 0.09, or 90 pence per 1,000-pound face amount, to 104.81.

Britain's currency has declined 9.3 percent against the euro since June, after gaining 12 percent in the first half of the year, as investors pared back expectations the recovery would be fast enough for the central bank to start raising interest rates.

The yield on the short-sterling interest-rate futures contract expiring in March 2010 was at 0.83 percent, from 0.95 percent a month ago, signaling investors are paring bets that policy makers will raise interest rates. The rate was at 1.49 percent on June 1.

Two technical indicators called moving averages crossed for the first time in more than two years, indicating the pound may extend its declines.

The U.K. currency's 50-day moving average, currently at 88.76 pence, dropped below its 200-day level today, a so-called dead cross. The last time it happened, on April 9, 2007, the pound closed at 68.04 pence per euro, before weakening 8 percent to end the year at 73.50 pence.

[bcarrier]

There is a view that the £ might drop another 30+% and ultimately be forced to join the  eurozone ....I saw this on another board. Spooky stuff.

I think the UK will beg to join at between £1.30 to £1.50 to the Euro,currently £0.92 to the Euro,when is a good question,King and co are doing everything they can to drive it down,but as the government debt situation,unemployment and the economy deteriorate, there will be a sudden precipitous drop,as the true extent of the appalling state of the economy is revealed.

One area that will not be cut is social security,of course it is one of the biggest budgets,but the government knows and has already been warnwed of "social unrest" - that's thousands of ethnics rioting, and mass street brawls and fighting with whites.They wouldn't want that broadcast around the worlds TV's would they?Johnny Foreigner might get the wrong impression.

I think the Tories cuts will be too little too late,the cuts they have just announced only add up to around £7billion a year,this is against a budget defecit of around £100billion growing exponentially,it barely scrapes the surface does it?But then again,they won't want the measures to work,as the long term plan is to join -so there will only be a pretence.

If I had to put a date for the join it would be 2011/2,maybe earlier(towards the end of 2010) if conditions worsen sooner.

[armaghniac]

I think the UK will beg to join at between £1.30 to £1.50 to the Euro,

Bollix. As noted above professional commentators are talking about a range of €1 to €1.11. The UK would never be allowed join the Euro with a super competitive exchange rate. They have been pissing everyone off for years and nobody would be willing to support them, to say nothing of the Irish government vetoing things at that rate or anywhere near it as it would ruin this country.

[Caid]

The Tories are coming in to power in England.  They have stated they will never join the Euro.  The notion that they will join in 2010/11 seems very far fetched.

It would do England a lot of good to be in the Euro though...but they don't believe in "One Europe" and still dream of the "Briitsh Empire"

[orangeman]

If the pounds falls in value to the euro the way people are saying, then Newry wil need an airport it will be that busy !

[muppet]

The Tories are coming in to power in England.  They have stated they will never join the Euro.  The notion that they will join in 2010/11 seems very far fetched.

It would do England a lot of good to be in the Euro though...but they don't believe in "One Europe" and still dream of the "Briitsh Empire"

Nothing to do with British jingoism despite that clever spin being put out to the redtops.

If they join they will become the second oil producing nation to trade their oil in Euros.

The first was Iraq prior to the invasion.

The Yanks will never let it happen.

[thebigfella]

The Tories are coming in to power in England.  They have stated they will never join the Euro.  The notion that they will join in 2010/11 seems very far fetched.

It would do England a lot of good to be in the Euro though...but they don't believe in "One Europe" and still dream of the "Briitsh Empire"

Nothing to do with British jingoism despite that clever spin being put out to the redtops.

If they join they will become the second oil producing nation to trade their oil in Euros.
The first was Iraq prior to the invasion.

The Yanks will never let it happen.

They don't trade in pounds now as far as i'm aware so why would they change if they join the Euro?

[muppet]

The Tories are coming in to power in England.  They have stated they will never join the Euro.  The notion that they will join in 2010/11 seems very far fetched.

It would do England a lot of good to be in the Euro though...but they don't believe in "One Europe" and still dream of the "Briitsh Empire"

Nothing to do with British jingoism despite that clever spin being put out to the redtops.

If they join they will become the second oil producing nation to trade their oil in Euros.
The first was Iraq prior to the invasion.

The Yanks will never let it happen.

They don't trade in pounds now as far as i'm aware so why would they change if they join the Euro?

They trade in dollars as do all oil producers.

[thebigfella]

The Tories are coming in to power in England.  They have stated they will never join the Euro.  The notion that they will join in 2010/11 seems very far fetched.

It would do England a lot of good to be in the Euro though...but they don't believe in "One Europe" and still dream of the "Briitsh Empire"

Nothing to do with British jingoism despite that clever spin being put out to the redtops.

If they join they will become the second oil producing nation to trade their oil in Euros.
The first was Iraq prior to the invasion.

The Yanks will never let it happen.

They don't trade in pounds now as far as i'm aware so why would they change if they join the Euro?

They trade in dollars as do all oil producers.

So why would they start trading in Euros then?

[Gnevin]

The Tories are coming in to power in England.  They have stated they will never join the Euro.  The notion that they will join in 2010/11 seems very far fetched.

It would do England a lot of good to be in the Euro though...but they don't believe in "One Europe" and still dream of the "Briitsh Empire"

Nothing to do with British jingoism despite that clever spin being put out to the redtops.

If they join they will become the second oil producing nation to trade their oil in Euros.
The first was Iraq prior to the invasion.

The Yanks will never let it happen.

They don't trade in pounds now as far as i'm aware so why would they change if they join the Euro?

They trade in dollars as do all oil producers.

http://en.wikipedia.org/wiki/Iranian_oil_bours

[thebigfella]

The Tories are coming in to power in England.  They have stated they will never join the Euro.  The notion that they will join in 2010/11 seems very far fetched.

It would do England a lot of good to be in the Euro though...but they don't believe in "One Europe" and still dream of the "Briitsh Empire"

Nothing to do with British jingoism despite that clever spin being put out to the redtops.

If they join they will become the second oil producing nation to trade their oil in Euros.
The first was Iraq prior to the invasion.

The Yanks will never let it happen.

They don't trade in pounds now as far as i'm aware so why would they change if they join the Euro?

They trade in dollars as do all oil producers.

http://en.wikipedia.org/wiki/Iranian_oil_bours

http://en.wikipedia.org/wiki/Iranian_oil_bourse