Will the euro fall further against pound

by the seaside

Impetus wrote: »

The EUR is over-sold at present. While it may fall a little more in the short term, you have a British election in May 2015. The outcome is scary - in terms of a coalition of extremists and more moderate parties. The uncertainty will cause the GBP to fall in my view. But you also have the money printing from Brussels starting in the next month or so, which will cause some measure of dilution of value.

In terms of USD -v- EUR - total US debt is 145* trillion against a GDP of 17 trillion. Of which federal, state and local public debt is 21 trillion. Which mkes the Greeks look pathetic in comparison when it comes to borrowing....


*http://en.wikipedia.org/wiki/Financial_position_of_the_United_States

I'm not sure I see anything scary or extremist about the UK election. The potential of an EU referendum and BREXIT is moderately scary.

I don't think it's scary at all.

Let them out.

The EU loses what, 5% of its budget? And how much more efficient will we become when we are rid of British posturing, which hinders decision-making (including budget negotiations).

It's like a spoilt child is constantly threatening to run away with the ball. Well let him. It's a rubbish ball anyway. Lets have our own and play on.

NIMAN

1.366 today

Eugene Norman

by the seaside wrote: »

I'm not sure I see anything scary or extremist about the UK election. The potential of an EU referendum and BREXIT is moderately scary.

It's certainly going to be a hung parliament.

by the seaside

Eugene Norman wrote: »

It's certainly going to be a hung parliament.

Probably, so it will end up as one of:

Tory + Lib Dem
Labour + Lib Dem
Labour + SNP
Labour + Lib Dem + SNP

Possibly a minority Labour or Tory government with a supply and confidence agreement with smaller parties. The extremist comment may be the potential for a Tory government with a supply amd confidence agreement with UKIP, but the electoral mathematics seems unlikely.

Interesting to see the two party system splitting apart.

NIMAN

£1 = £1.388 on CF today

Geuze

http://www.ecb.europa.eu/stats/exchange/eurofxref/html/index.en.html

Official ECB exchange rates here.

The euro is at 71.86 pence yesterday.

That's down about 12p in a year.

NIMAN

Tuesdays rates on CF:

£1 = €1.403
€1 = £0.7096

davwain

NIMAN wrote: »

Tuesdays rates on CF:

£1 = €1.403
€1 = £0.7096

Compared to the Euro's Ukrainian counterpart (the hryvnia), the euro is doing relatively good vs the pound. 1 UAH costs about CDN$0.06 (about £ 0.03) to buy.

A recent blog in The Economist called Ukraine's economy "The new Greece in the east". It's debatable whether the euro has further to fall vs the GBP, but Ukraine's economy is so bad that the hryvnia may (whether instead of or in addition to the euro) have further to fall vs the GBP.

the_monkey

What about the poor EURO - US Dollar exchange rate, is this expected to continue to plummet ?

davwain

davwain wrote: »

Compared to the Euro's Ukrainian counterpart (the hryvnia), the euro is doing relatively good vs the pound.

Why are you comparing the euro to the UAH?

There are not enough --->

davwain

A Tyrant Named Miltiades! wrote: »

Why are you comparing the euro to the UAH?

There are not enough --->

I believe Ukraine's economy is in worse shape than at least some of the Eurozone's economies. Among Eurozone countries, none, according to Transparency International's most recent Corruption Perceptions Index, are as corrupt as Ukraine. I believe corruption is a big drag on Ukraine's economy, and is likely to continue to be.

by the seaside

davwain wrote: »

I believe Ukraine's economy is in worse shape than at least some of the Eurozone's economies. Among Eurozone countries, none, according to Transparency International's most recent Corruption Perceptions Index, are as corrupt as Ukraine. I believe corruption is a big drag on Ukraine's economy, and is likely to continue to be.

I see a new marketing strapline coming:

Eurozone: at least we're not the Ukraine.

davwain

davwain wrote: »

I believe Ukraine's economy is in worse shape than at least some of the Eurozone's economies.

They're in the middle of a civil war,their currency has collapsed, they intend to restructure their sovereign debt, and they have had to impose draconian measures like their banks being banned from purchasing foreign currency.

There is simply no comparison with the Eurozone or the European member states.

Ukraine has bigger problems than all of us combined.

Rightwing

the_monkey wrote: »

What about the poor EURO - US Dollar exchange rate, is this expected to continue to plummet ?

Algos driven. Epic short squeeze this evening.

davwain

A Tyrant Named Miltiades! wrote: »

They're in the middle of a civil war,their currency has collapsed, they intend to restructure their sovereign debt, and they have had to impose draconian measures like their banks being banned from purchasing foreign currency.

There is simply no comparison with the Eurozone or the European member states.

Ukraine has bigger problems than all of us combined.

Yep. Corruption is a big one. Stacey Dooley tries to make this clear in a BBC documentary on Ukraine's big drug trafficking problem.

I love to read the Bank of England MPC's minutes, because it is impossible not to recall the 'Fidelity Fiduciary Bank' scene conveyed by Dick van Dyke in Mary Poppins.

Aanyway, the minutes for the March meeting here. Not much to say about Euro policy, just noting their wariness.

http://www.bankofengland.co.uk/publications/minutes/Documents/mpc/pdf/2015/mar.pdf

Impetus

the_monkey wrote: »

What about the poor EURO - US Dollar exchange rate, is this expected to continue to plummet ?

Why should the EUR plummet? The EUR has been in trade surplus with the US since the EUR currency started. Europe makes everything it and the world (including rich Chinese etc) needs - good food, wine, Mercedes Benz, BMW, Miele, Ferrari, Porsche, Grohe, Mouton Cadet, Carrefour, Casino, Hermes, Cartier, Louis Vuitton, Airbus, Gucci, Thales (air traffic management/encryption).... I could go on and on listing European brand names, Europe has the best autoroute/bahn network in the world, the EUR has been strong since it was invented, etc. America and China can't produce similar products. Only Japan has succeeded in some respects with meeting European quality levels - eg Sony alpha 7S camera -v- Leica M. Having said that Leica lenses are streets ahead.

The purpose of a currency is a store of value and a means of exchange. Might as well have a strong currency (forcing companes in the currency area to become more efficient) and the savings of the people in that currency zone hold their value.

And to answer your question, the GBP will fall in value against most major currencies as the elections approach with the risk of that "country" leaving the EU, and the issue of multiple parties forming a coalition - Anglo Saxons can only deal with black and white situations, unlike the rest of Europe.

Eugene Norman

Impetus wrote: »

Why should the EUR plummet? The EUR has been in trade surplus with the US since the EUR currency started. Europe makes everything it and the world (including rich Chinese etc) needs - good food, wine, Mercedes Benz, BMW, Miele, Ferrari, Porsche, Grohe, Mouton Cadet, Carrefour, Casino, Hermes, Cartier, Louis Vuitton, Airbus, Gucci, Thales (air traffic management/encryption).... I could go on and on listing European brand names, Europe has the best autoroute/bahn network in the world, the EUR has been strong since it was invented, etc. America and China can't produce similar products. Only Japan has succeeded in some respects with meeting European quality levels - eg Sony alpha 7S camera -v- Leica M. Having said that Leica lenses are streets ahead.

The purpose of a currency is a store of value and a means of exchange. Might as well have a strong currency (forcing companes in the currency area to become more efficient) and the savings of the people in that currency zone hold their value.

And to answer your question, the GBP will fall in value against most major currencies as the elections approach with the risk of that "country" leaving the EU, and the issue of multiple parties forming a coalition - Anglo Saxons can only deal with black and white situations, unlike the rest of Europe.

You could have made most of that post a year ago -- British elections aside -- and you would have been wrong. Sterling massively increased against the euro. So did the dollar. The dollar is expected to continue to increase, simply because Europe is printing money and the U.S. has exited QE and is going to increase interest rates. Which will increase capital flow to the U.S.

You are on firmer ground with the british elections, however once resolved for similar reasons sterling will trend towards 1.5/1.6 euro.

Sheldons Brain

Eugene Norman wrote: »

You are on firmer ground with the british elections, however once resolved for similar reasons sterling will trend towards 1.5/1.6 euro.

What sort of trade deficit would the UK have if £ was €1.60?

Eugene Norman

Sheldons Brain wrote: »

What sort of trade deficit would the UK have if £ was €1.60?

Who knows, but they were there before until about 2006.

Sheldons Brain

Eugene Norman wrote: »

Who knows, but they were there before until about 2006.

Inflation has been higher in the UK than the Euro in pretty much every year since then. The UK needs an exchange rate a minimum of 15% lower than 2006.