PalenQ

Pound at $1.85 - down from over $2.00 not long ago - 11th straight day decline against dollar - most straight days in 37 years say Guardian

Guardian says fears of the British economy being in tatters is fueling the dumping of the pound.

Great new for travelers if it keeps sinking like a rock. How far will the pound go down?

logos999

The pound is virtually unchanged since March between .78 and .80

There must be something wrong with the dollar, not the pound.

flanneruk

The "tatters" argument's misplaced: there' no significant difference between UK and US unemployment, economic growth or inflation. And the UK economy's still growing - unlike most ofthe Eurozone.

The currency's going down partly because of relative optimism about the US and partly because the markets think UK interest rates (the highest of the major economies, and the reason for sterling's relative strength) will be cut to stimulate growth.

Don't expect the fall necessarily to continue: the last few weeks have been the sharpest sterling fall in decades, and interest rate cuts may now be fully priced in.

wren

The Financial Times says:

http://www.ft.com/cms/s/0/dc97963e-6...0779fd18c.html

PatrickLondon

Exchange rates do not reflect only the relative strengths and weaknesses of either trading economies or government finances, still those of different societies as a whole. It's mostly about where currency traders think their profit margins might be found, bearing in mind relative interest rates, and what they think all sorts of economically and financially important people think. It's all at any number of removes from most people's idea of reality, like most newspaper headlines. Life just isn't that dramatic most of the time.

qwovadis

Dollar and oil are inversely proportional...

Perception of worse economy in UK
higher unemployment interest rates
fueling the fire...

PalenQ

down to $1.83 in today's NYTimes

travelgourmet

I've definitely been reading more and more doom-and-gloom about the UK economy lately, including a recent report that the economy stopped growing last month. Apparently, many are at least whispering recession. Certainly, it will be a tough road ahead for the UK. With high employment in financial services, they will be hit hard by the problems that sector is facing. And the UK has their own, home-grown housing and consumer credit problems.

One of the articles I read said that Australia was in even worse shape, but didn't go into too much detail as to why they thought that.

Surely, any slowdown is looking to be global, save some of the Asian economies, perhaps. So, I'm not sure it is so much that the British (or Eurozone) economy is doing that bad, but that folks are waking up to the realization that they are not doing enough better, relatively, than the US economy to justify the high price of their currency. In other words, it may be as much a realization that the sell-off of the dollar was overblown, as anything. Certainly, anyone who thought that a downturn in the US economy would remain contained there is a special kind of fool.

PalenQ

So reports from the Cotswolds the past few years ballyhooing the British Tiger vs American sluggishness were just hot air?

Seems so - just took longer for UK to tank than US, which now may pick up before UK bottoms out?

Cholmondley_Warner

We've had ten years of Labour rule. It's a wonder things aren't much much worse.

There are times when the public sector is quite a nice place to be....

hetismij

There are times when the public sector is quite a nice place to be....

Do you still get a nice index linked pension at 60 or has that gone nowadays?
My OH has one on hold for him from his days with a research council. He'd be retired now if we hadn't moved to Cloggieland.

Cholmondley_Warner

Do you still get a nice index linked pension at 60 or has that gone nowadays?>>>>

Yes. But I'm sure it won't last too much longer.

Carta_Pisana

WSJ: Europe's gloom is boon to dollar: "..the dollar has gained 8% vs the euro since July.....pound touched a 26 year high...left it intensely vulnerable to a reversal..the pound is the world's great whipping boy at the moment..." hehehe

PalenQ

And for about ten years of New Labour's rule Britain has had perhaps Europe's most vibrant economy

now that there is an inevitable downturn - in part due to greedy bankers it's all New Labour's fault

nice try at pulling the wool over our eyes.

I'd almost wish the election of Cameron were today as he would then be blamed for the ensuring recession

Cholmondley_Warner

Labour were screwing the pooch since 1997. Everythying was on tick. Now they have to pay the bill.

Every generation has to learn about Labour governments the hard way. Now it's this lot's turn.

travelgourmet

<i>So reports from the Cotswolds the past few years ballyhooing the British Tiger vs American sluggishness were just hot air?

Seems so - just took longer for UK to tank than US, which now may pick up before UK bottoms out?</i>

Yes and Yes, IMO. Most of the reports I've read talk about a perception that the US is better prepared to handle the downturn. And I think there is a fair bit of truth to that.

I laugh every time I read about how the UK or (to a somewhat lesser extent) Europe, will remain insulated from a US slowdown. It is just not going to happen in this day and age. The two sides of the Atlantic are just too-tightly bound.

But hey, I might start actually buying stuff in Europe again, rather than stuffing the suitcase everytime I return from the US.

xyz123

Oil is down...and with it the dollar has strengthened. Now we know the real reason why.

If oil had continued to rise, a lot of resetnment would have built in in the USA towards the clown who currently occupies the White House, unfortunately for us, and might have been reflected in a Republic loss in November.

But notice as the election approaches, it is in the interest of big oil to have gasoline prices down....I am sure that by November it will be under $3/gallon here so the Republicans can say, see things aren't so bad and of course once McCain gets in, well he'll see to it that the big oil interests that rule the Republic party are able to raise the prices again.

Just you wait and see what happens between now and November and after the election!

PalenQ

I wonder if the Cotswold Hills will be immune from the coming recession in England?

stfc

Why, do you think they'll flatten off a bit?

PalenQ

Well i think as long as the wool trade keeps up the Hills will be fine - those Flemish weavers can use all they can get i think so it's rosy for Cotswoolians i think.