Wednesday, 10 December 2008

Parity - here we come

Since August 2007, sterling has fallen 23 percent against the euro. At the rate it is falling, we should see a one-to-one exchange rate sometime early in the new year.

Anyone fancy a trip to Europe this summer? Not me, I can't afford it.

17 comments:

Anonymous said...

Dear Alice,

What about a US dollar/Sterling chart?

Thank you in advance.

Rambo

Nick von Mises said...

I expect this to reverse soon. Sterling base rate is now lower than the ECB, and is priced in. When Trichet finally cuts near zero expect a relative recovery in the £.

I don't expect the sterling slide to continue much longer. It's just happened earlier than the Euro and Yen slides.

Anonymous said...

I would say Euro and dollar parity by xmas. Mark my words...

M said...

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Mitch said...

The military on Cyprus get a much better exchange rate than that.

mike said...

I believe that the pound will soon gain strength. The Euro economies have far more problems than the UK. It’s probably much harder to bring multiple countries economies out of recession whose interest rates are all tied.

Anonymous said...

Just back from Paris. Painful experience.

london estate agent said...

Definitely interested in seeing similar charts for other rates.

Anonymous said...

Alice,

Do you really think the GBP's going to fall much further? It's dropped a lot so far. I'm guessing that the unwinding of the carry trade has caused a fair bit of the drop with all the reductions in interest rates. Interest rates can't go down much further so I can't see a further drop being as precipitous as what we've had so far. Or should we all sell our pounds whilst they're still worth something!?

dearieme said...

Perhaps you'll be able to afford Greece, though, Alice.

electro-kevin said...

http://www.spectator.co.uk/coffeehouse/3078296/the-true-extent-of-britains-debt.thtml

I'm afraid I HAVE to go to Europe this year - in-laws demand that I visit them. Oh well, a chance to lose weight and go on the wagon whilst getting a sun tan.

Anonymous said...

You must hedge now: three accounts: sterling, euro, dollar. Keep cash in all three to keep your options open and not risk being trapped on this fetid, toilet of an island.

Anonymous said...

"Fetid toilet"? Not far from the truth!

I was listening to Peter Schiff's podcast and he recommended the currencies of the following countries: Singapore, Hong Kong, Sweden and Switzerland. But he was talking from a US investor perspective...

Anyone have any thoughts on these?

Alex in Dubai said...

Parity by xmas, for sure.

Anonymous said...

http://www.spectator.co.uk/coffeehouse/3078296/the-true-extent-of-britains-debt.thtml

Parity - if you're lucky.

fajensen said...

Hope GBP drops some more - I am looking to buy a PCB design package and the one I want happens to be British ;-)

Anonymous said...

The Eurozones problems are hidden behind the various activities of the 15 members whilst the UK's problems are there for everyone to see.

As its taken a battering I'm sticking with my GBP rather than sell at a low.

Chefdave.