£ still dropping against the Euro... How long till it's 1=1
Discussion
1.129 Currently, has been steadily dropping for weeks now (end of Feb).
It's not doing my European holiday budget any good and I'm tempted to go to America instead!
Anyone else think it will get to 1-1 soon?
How come it is still dropping even though the likes of Greece, Ireland and Portugal are needing bail outs? I thought it would have bolstered the £.
It's not doing my European holiday budget any good and I'm tempted to go to America instead!
Anyone else think it will get to 1-1 soon?
How come it is still dropping even though the likes of Greece, Ireland and Portugal are needing bail outs? I thought it would have bolstered the £.
The EU problems like Greece won't help the GBP as the EU is one of our largest trading partners so if their growth demises, as it currently is in parts, then the demand for our products and thus the GBP to buy them will fall as well.
So, when Europe falls so does our currency as a crude rule.
However, even though the northern states are doing better, as a collective the EU will lag the UK in it's recovery and so the growth in demand for GBP will outstrip the EUR over the coming years.
I think it unlikely that we will reach parity with the Euro as it is in decline and we would need to completely reverse our current economic situation to out decline it.
It's obviously not impossible but it is unlikely.
Look to the US and the results coming out of it's corporate sector and look to ours as well. Both are rising and in the US strongly.
Another factor is that the GBP isn't under the seller's threat of total destruction as the Euro is.
All in the very basic view is that GBP is on the up while the EUR is possibly even in terminal decline.
So, when Europe falls so does our currency as a crude rule.
However, even though the northern states are doing better, as a collective the EU will lag the UK in it's recovery and so the growth in demand for GBP will outstrip the EUR over the coming years.
I think it unlikely that we will reach parity with the Euro as it is in decline and we would need to completely reverse our current economic situation to out decline it.
It's obviously not impossible but it is unlikely.
Look to the US and the results coming out of it's corporate sector and look to ours as well. Both are rising and in the US strongly.
Another factor is that the GBP isn't under the seller's threat of total destruction as the Euro is.
All in the very basic view is that GBP is on the up while the EUR is possibly even in terminal decline.
ATTAK Z said:
I find the Aussie dollar more interesting ... it's now overtaken the US $ and still climbing ... 2 years ago it was 2 to the £, now its 1.5
That's just a commodity play. It's current fortune is tied solely to the over valuation of the commodity markets. The more the prices rise the more the Chinese need to convert into AUD to purchase what they need.
It says nothing of the quality of the trade but just highlights the specific reason for it's strength and where the weak points are.
DonkeyApple said:
That's just a commodity play. It's current fortune is tied solely to the over valuation of the commodity markets.
The more the prices rise the more the Chinese need to convert into AUD to purchase what they need.
It says nothing of the quality of the trade but just highlights the specific reason for it's strength and where the weak points are.
Is that what's helping the NZD too? I used to get $3/£1, now a tourist is lucky to get $2.The more the prices rise the more the Chinese need to convert into AUD to purchase what they need.
It says nothing of the quality of the trade but just highlights the specific reason for it's strength and where the weak points are.
rxtx said:
Is that what's helping the NZD too? I used to get $3/£1, now a tourist is lucky to get $2.
That's probably got more to do with the collapse of the GBP due to over borrowing and printing new money in contrast to NZ being notably less f
ked. FX is a pairs trade so the fall or rise can be attributed to just one side or both and driven by many factors.
DonkeyApple said:
That's just a commodity play. It's current fortune is tied solely to the over valuation of the commodity markets.
The more the prices rise the more the Chinese need to convert into AUD to purchase what they need.
It says nothing of the quality of the trade but just highlights the specific reason for it's strength and where the weak points are.
The more the prices rise the more the Chinese need to convert into AUD to purchase what they need.
It says nothing of the quality of the trade but just highlights the specific reason for it's strength and where the weak points are.
DonkeyApple said:
That's just a commodity play. It's current fortune is tied solely to the over valuation of the commodity markets.
The more the prices rise the more the Chinese need to convert into AUD to purchase what they need.
It says nothing of the quality of the trade but just highlights the specific reason for it's strength and where the weak points are.
But if that "commodity play" lasts for a while, it stops being such and becomes a "truth". China's demand for raw materials seems unlikely to abate, any more than Australia's supply of them. The commodities in question almost create an alternative "gold standard" for defining currency values there, surely?The more the prices rise the more the Chinese need to convert into AUD to purchase what they need.
It says nothing of the quality of the trade but just highlights the specific reason for it's strength and where the weak points are.
ridds said:
Do we actually have anything to export anymore though?
Quite a bit really; aside from the industrial stuff (all the car companies may be foreign owned now, but they buy lots of bits from companies that are UK owned, for example) we do a lot of architecture, engineering, film, computer games, and other cool stuff. A weak pound makes the UK more attractive for that stuff, entices tourists, and keeps worker earnings within the UK. A good thing for the economy.davepoth said:
ridds said:
Do we actually have anything to export anymore though?
Quite a bit really; aside from the industrial stuff (all the car companies may be foreign owned now, but they buy lots of bits from companies that are UK owned, for example) we do a lot of architecture, engineering, film, computer games, and other cool stuff. A weak pound makes the UK more attractive for that stuff, entices tourists, and keeps worker earnings within the UK. A good thing for the economy.
Definitely.
I was talking to a chap who's involved in power engineering production in the UK, who said he, and all of his competitors, are turning orders away from abroad because they don't have the capacity to fulfil.
We might not be a dirty manufacturing country any more, but we still do a lot of high engineering.
As far as the auto engineering stuff goes that's a negative I'm afraid as it's an industry I work in. The week pound hasn't really brought any more trade in.
Those that are here are for tech knowledge and they'll pay whatever the rate is for that.
It's been said recently that we're suffering due to a lack of a supplier base to support what little assembly (can't really call in manufacturing) we do as a country.
Those that are here are for tech knowledge and they'll pay whatever the rate is for that.
It's been said recently that we're suffering due to a lack of a supplier base to support what little assembly (can't really call in manufacturing) we do as a country.
maser_spyder said:
davepoth said:
ridds said:
Do we actually have anything to export anymore though?
Quite a bit really; aside from the industrial stuff (all the car companies may be foreign owned now, but they buy lots of bits from companies that are UK owned, for example) we do a lot of architecture, engineering, film, computer games, and other cool stuff. A weak pound makes the UK more attractive for that stuff, entices tourists, and keeps worker earnings within the UK. A good thing for the economy.Definitely.
I was talking to a chap who's involved in power engineering production in the UK, who said he, and all of his competitors, are turning orders away from abroad because they don't have the capacity to fulfil.
We might not be a dirty manufacturing country any more, but we still do a lot of high engineering.
The last British aircraft manufacturing is done by Airbus UK and that's just wings, albeit the best in the world. The problem with high end is there is no meat in it, one day your on top, then the next it's gone East.
The UK has the 3rd largest budget deficit in Europe, that's why £ is so weak and will get weaker. It's down 30% on the Euro compared to 3-4 years ago. The € is strong because the Eurozone still has huge exports (even with the weaker smaller countries) and a solid manufacturing base that's been invested in over the last 40 years.
Mojocvh said:
Small scale stuff.
The last British aircraft manufacturing is done by Airbus UK and that's just wings, albeit the best in the world. The problem with high end is there is no meat in it, one day your on top, then the next it's gone East.
Is it? Blimey. Please dont tell Warton that though. Or Salmsbury or Brough. They will only whinge and they're right buggers when they start moaning.The last British aircraft manufacturing is done by Airbus UK and that's just wings, albeit the best in the world. The problem with high end is there is no meat in it, one day your on top, then the next it's gone East.
davepoth said:
Quite a bit really; aside from the industrial stuff (all the car companies may be foreign owned now, but they buy lots of bits from companies that are UK owned, for example) we do a lot of architecture, engineering, film, computer games, and other cool stuff. A weak pound makes the UK more attractive for that stuff, entices tourists, and keeps worker earnings within the UK. A good thing for the economy.
Plenty of downsides to a weak currency and if our manufactures can only survive with one they aren't very efficient. German and Japanese expoters can operate successfully with high labour costs and a strong currency. If a firm is relient on a weak currency what happens if the currency strenghtens?Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff