£terling and $ollar crashing against the €uro

[armaghniac]

Beware of Greeks bearing gilts.

[muppet]

no the € doesn't look like will be surging anywhere. The PIGS are all being lumped together amid growing concern as people look at Greece who have been fiddling the books and a bigger than expected deficit in Portugal people think where is next. Spain has one of the better debt to GDP ratios, but is near 20% unemplyment and Spain's banks have been crucified in the market over last few days, much more so than other countries banks. Santander reported strong results way ahead of consensus and only about 25% of net income comes from Spain, yet stock is down hugely in space of couple days.

Currency wise who know what is going to happen. People dont seem to think the EMU will actually break, but feeling is that France and Germany won't bail out people willy-nilly. Feeling that Greece and other countries have a lot more to do before seeing the same sort of good will afforded to Ireland's budget cuts. Apart from that EU growth is anaemic.

The USD deficit is downright scary and we very much seem to be running the risk of just pushing this a few years down the line. China has started diversifying its reserves but would be none too pleased to see a $ crash at this point in time.

Then there is sterling. Massively leveraged economy which is hugely dependent on financial services and with a soaring deficit and debt/GDP ratio. PIMCO's Bill Gross described UK gilts as nitroglycerine the other day...

Big deficits and huge leverage all round but then again Japan has had ENORMOUS debt/GDP ratios for years...it hasn't quite burned them yet but they have been fighting deflation for God knows how long. A few respected financial commentators really see Japan going tits up several years down the line.

Personally I wish I was earning AUD...those lucky buggers have a currency which looks well supported and a great lifestyle!

I thought it was PIIGS compromising of Portugal, Italy, Ireland, Greece & Spain?

[CiKe]

Ireland wasn't originally in there, was used to refer to the other four. More recently given Ireland's precarious situation people have talked about Ireland being the 'I'. It probably should be PIIGS though.

[armaghniac]

€/£ = 0.84362 presently. The Euro has its problems, but an indecisive result in the UK election might knock the £ back down.

[mannix]

and then you had BUBBA as well,
Bulagaria, uganda,brazil, belize and Andora. They are the real problem. The original was FLUTE, which comprised of France,Lithuania,Ukraine,Thailand and Ethiopia which we all know started the Celtic Tiger with their cheap imports from our sweat shops.
COCKUP which was Crete,Ostralia,czech republic,kenya,Uganda and Poland were the very first group which in the 1800s were know for their love of the pint of Guinness to bring hangovers and smelly guinness farts to the world outside Ireland.

[stew]

its got to do with the rising deficits of some European countries   particularly  Greece, Portugal. Spain and Ireland


http://www.nytimes.com/2010/02/06/business/06markets.html?hp

Ireland better go tits up next before the EU ruun out of bail out money.

[EC Unique]

Whats going on today? Sterling rocketing against euro?

http://news.bbc.co.uk/news/business/market_data/currency/11/13/intraday.stm

[armaghniac]

Sterling rocketing against euro?

Big lodgement by diesel launderers.

[armaghniac]

from De Indo.
------------------------------------------
THE euro will fall below 80p sterling by the end of the year, and could go as low as 70p, economists at Ulster Bank have forecast.

The threat of a vicious circle or "negative feedback loop" between the financial system and the real economy of the euro area has resurfaced, chief economist Simon Barry says in his latest focus on markets.

"Market concerns about unsustainable public finance trends have forced euro-area governments to announce additional fiscal correction measures. While absolutely necessary, such action does constitute a further headwind to recovery," he says.

One conclusion is that the European Central Bank will not raise interest rates from their 1pc level for another 12 months. "Irish borrowers are likely to benefit from another year of record low rates," the report says.

Given the difficulties facing the eurozone economy it is difficult to justify the current level of the euro and further falls are on the cards, Mr Barry said.

"In the current environment and we expect further declines by year-end to $1.12 and 78p. There is a risk of an undershoot, in the event of another major shock to the eurozone, which could see a return to parity or lower against the dollar and to 70p sterling."

Weaknesses

The report says the Greek situation exposed important weaknesses in the institutional and governance framework underpinning the euro area.

"It also gave investors plenty of time to consider the extent of vulnerabilities in other member states, which has given rise to heightened concern about the ability of countries across the eurozone, and beyond, to manage very large budget deficit and debt positions.

"The fragile state of the debt markets means that decisive action is required immediately to demonstrate commitment to such a course of action," it says.

It sees a danger that a sustained period of weakness in the global financial system could transmit itself into weaker business and consumer confidence, triggering a lurch lower in real economic activity.

"The economic data for May has brought some modest downside surprises, but it is difficult to tell whether this is merely some payback for prior strength or a signal of a more ominous dynamic.

[armaghniac]

almost the 80c now
€/£ = 0.80975

[johnneycool]

almost the 80c now
€/£ = 0.80975

But is this bad news for the exporters that the Tory's are basing their economic strategy on in reducing the deficit??

[orangeman]

almost the 80c now
€/£ = 0.80975

But is this bad news for the exporters that the Tory's are basing their economic strategy on in reducing the deficit??

Certainly is.

[illdecide]

It's nearly time now to go back to Dundalk for the diesel instead of Sainsburys

[armaghniac]

I hope you people with access to Imperial lucre had the good judgement to convert it to €uro when it was getting €1.27, now that it is €1.14 perhaps you should began planning moving the loot back.

[FL/MAYO]

Any one ever try Currency Fair, seems like a good way to exchange money.

http://www.currencyfair.com/