Yikes! The $ rate is in freefall

[wayneg]

Here in UK I feel Middle class is a very well paid working couple that can easily afford to pay for childrens schooling, private healthcare, run a couple of luxury cars etc.
I agree, to compare Middle class US is what we term working class.

 

[juliebro]

The situation has been made worse because largely unregulated hedge fund activity is not confined to stocks and shares. It is much wider in that it has embraced commodities and currencies. The biggest hedge fund currency play has been the yen carry trade, by which geared hedge funds borrowed yen at nominal interest rates and bought higher yielding currencies such as the New Zealand dollar where they obtain over 6% on deposit and even sterling, where 4.5% is available. Because these funds are now in very serious trouble in order to repay their debts usually denominated in dollars, they are selling higher yielding currencies such as sterling, repaying their yen debt and then converting the yen back into dollars in order to pay their ultimate debt to the investment banks which is in dollars. Hence the extraordinary strength of US Treasuries, given the fiscal and trade deficits.
This accounts for the strength of the yen and of the dollar and for the weakness of higher yielding currencies such as sterling.

 

[paulh]

The situation has been made worse because largely unregulated hedge fund activity is not confined to stocks and shares. It is much wider in that it has embraced commodities and currencies. The biggest hedge fund currency play has been the yen carry trade, by which geared hedge funds borrowed yen at nominal interest rates and bought higher yielding currencies such as the New Zealand dollar where they obtain over 6% on deposit and even sterling, where 4.5% is available. Because these funds are now in very serious trouble in order to repay their debts usually denominated in dollars, they are selling higher yielding currencies such as sterling, repaying their yen debt and then converting the yen back into dollars in order to pay their ultimate debt to the investment banks which is in dollars. Hence the extraordinary strength of US Treasuries, given the fiscal and trade deficits.
This accounts for the strength of the yen and of the dollar and for the weakness of higher yielding currencies such as sterling.

with the $ looking like the emporers new cloths then
Paulh

 

[juliebro]

Pretty much

 

[Clare D]

Have seen the $ exchange rate increase today on Fair Fx now $1.5775. It was less than this earlier today.

 

[disneyfantasy]

There are lots of signs that the UK is in poop as deep as anyone else.

 

[madmumof2]

It's odd, I assumed Obama becoming president would have lowered the amount of $'s per £, but the day he was elected it actually went up to 1.5825 to the £.

It's now gone down to 1.5675. :S

 

[wayneg]

It's odd, I assumed Obama becoming president would have lowered the amount of $'s per £, but the day he was elected it actually went up to 1.5825 to the £.

It's now gone down to 1.5675. :S

Getting the right man for the job in US should strengthen the US economy and the $, which is worse for UK tourists. I guess biggest factor today is slashing base rate to 3%, a bit of a panic move many did not expect, meaning they are expect the recession to hit hard, not good for the £.

 

[paulh]

Getting the right man for the job in US should strengthen the US economy and the $, which is worse for UK tourists. I guess biggest factor today is slashing base rate to 3%, a bit of a panic move many did not expect, meaning they are expect the recession to hit hard, not good for the £.

my last word on the this (honest),asi t looks like weve admitted were in dire problems,and have taken the medicne in full,unlike the ECB.were comended as we will get better sooner so our rate should go up
Paulh

 

[Frances999]

I think the GBP will fall further following that 1.5% IR cut........

 

[cliveywolves]

mmmm i think we gonna be looking at 1.50 - 1.55 for a while now imo......

friend from work lives with a currency manager at lloyds tsb he said it not looking good for the next 3-6 months on the dollar front unless something big happens, they expected a bigger change when obama got in and to hold for at least a few days didnt really happen though...

 

[Tanzanite]

Hopeing dollar starts getting stronger then Americans can start coming back to Europe good for british economy.

 

[disneyholic family]

that cut in the interest rate should send the pound into an even steeper tailspin against the dollar....i would pay off holidays immediately if it were me..

but then again, it's not clear what will happen to the US economy...

clearly the worldwide markets are still very very nervous about what's coming...

as for recession....i hope the situation is that good....i'm beginning to think we're going into a global depression...

and if it is that bad, the US is probably in the best shape of any economy....again bad news for the pound and the euro (which is doing almost as badly as the pound against the dollar)...

time to eat some more chocolate and stop worrying...

 

[oceanscape]

that cut in the interest rate should send the pound into an even steeper tailspin against the dollar

Yep, the interest cut means the pound is going to tumble even more. Better get buying those dollars, IMHO.

 

[wayneg]

Yep, the interest cut means the pound is going to tumble even more. Better get buying those dollars, IMHO.

It means nothing in the current market. New rules are being written every day. At 1am this morning the $/£ rate was $1.55 its now $1.58 up 3 cents.
Toss a coin and you have as much chance as an expert of getting the right direction.

 

[oceanscape]

It means nothing in the current market. New rules are being written every day. At 1am this morning the $/£ rate was $1.55 its now $1.58 up 3 cents.
Toss a coin and you have as much chance as an expert of getting the right direction.

You can't measure the effect of an interest rate change on the exchange rate after one day! Over the next 3-4 weeks most key economic forecasters predict further decline in the pound against the dollar. Obviously it will fluctuate up-and-down from day-to-day...the key is to look at longer term trends. PPP is $1.50 so that's probably where it will settle out eventually.

 

[buzz for boys]

Personally I can deal with around the 1.5 mark as that what it always seem to be when we go to wdw. I know its bad compared to the last year or so but actually last time we wnt to usa in 2004 it was considered good at 1.50 - boy how times change.
Im not saying i wont jump for joy if it rises a little above that and yes i am kicking myself for not buying dollars when they were 2.00

 

[wayneg]

How wrong was this forcast? Maybe they have it right for next year
http://www.forecasts.org/pound.htm

 

[oceanscape]

How wrong was this forcast? Maybe they have it right for next year
http://www.forecasts.org/pound.htm

 

[Claire L]

How wrong was this forcast? Maybe they have it right for next year
http://www.forecasts.org/pound.htm

Lol, wish it was as they predicted!

Claire