Spread Bet on sterling reaching parity

partypiper

The Bank of England is making a descionn on rates on the 8th of JAn with a hefty rate cut likely

The ECB has hinted it may hold of on any early new year interventions meaning that it is likely that the current 1% gap (2% Vs. the EU 3%) will further widen or at worst stay static putting increasing pressure on sterling meaning parity is almost inevitable.

Any comments on the above assumptions are welcomed

So lets take the current rate at .9800 EUR/GBP there's 200 points left to go for parity.

If you spread bet 10euro for each point thats 2,000euro is it just me or is it a very good punt to think sterling will further weaken and therefore its worth getting into spread betting for this

Bluetonic

partypiper wrote: »

The Bank of England is making a descionn on rates on the 8th of JAn with a hefty rate cut likely

The ECB has hinted it may hold of on any early new year interventions meaning that it is likely that the current 1% gap (2% Vs. the EU 3%) will further widen or at worst stay static putting increasing pressure on sterling meaning parity is almost inevitable.

Any comments on the above assumptions are welcomed

So lets take the current rate at .9800 EUR/GBP there's 200 points left to go for parity.

If you spread bet 10euro for each point thats 2,000euro is it just me or is it a very good punt to think sterling will further weaken and therefore its worth getting into spread betting for this

Your problem is you don't know where it's going to go before if and when it does reach parity.

Currently at .9659, so if we say it was at .98 when you bought, would you have been able to cover the 1.5k loss your sitting at now? What if were to drop to .95? It's not that unusual, it's quite volatile at the moment.

Your just going to make money based on luck, nothing else.

Bluetonic

Just to show what I mean an hour later your looking at 0.9565 (@ 12.33)

I'm sure the majority of people stops would have been triggered at this stage (.98 to .956) and your losses would be locked in.

In saying that you'll historically find fx rates are crazy during the last few hours of year end. Big fluctuations, but still can show you what can happen.

Bluetonic

Currently at 0.9142. You'd be looking at loses of around 6.5k at the moment.

Roonbox

its prob an ok long term bet, i think its inevitable eventually

if you have enough in your account to keepo you covered -

pocketdooz

Roonbox wrote: »

its prob an ok long term bet, i think its inevitable eventually

if you have enough in your account to keepo you covered -

Why ?

Roonbox

because the sterling is almost as doomed as the dollar

spiderdan

any predictions? will sterling continue to strengthen, will it be in the 80's by Friday?

Im looking at buying a product in England now, just wondering if its worth holding off or buy now, only just got the funds today!

okidoki987

Sterling has always been a big gainer of the interest rate differencial between 2 currencies.
Most major ccys wouldn't have had rates anywhere close to the UK's over the last 5-10 years.
The ccy has then suffered as interest rates have collapsed and that was why we were up at .9800 just before year end.
If had fallen so far so fast over December, there was only 1 way for it to go when the NY started.
It's now a question of whether GBP rates will remain low while ECB rates remain high.
I don't agree with the arguement that GBP will deffo hit parity.
I'd imagine that the Banks have loads of orders from companies, hedge funds etc all taking long term bets.
I would be very happy being long of GBP at over par (on a long term basis).
Could see a lot of ROI customers buying property in the UK if it gets there.

Google property auctions in UK and see the value over there at mom and then factoring in the exchange rate, it's so much better value then what's available over here.

Partypiper
You might have a look at buying an option but be aware depending on the expiry and strike rates, it might take up a big chunk of your stake.

Scottie99

now 0.9034