The pound soars !!

In approximately 8 hours the dramatic fall caused by the S & P Report was wiped out with the day actually finishing with the GBP gaining – this was mainly caused by speculation that the USD faced similar problems.

This is shown quite clearly in these two day intraday charts from the BBC for the GBP/USD and the GBP/THB.

The similarities between the two charts demonstrates the close relationship between the USD/THB on the currency markets.

GBP / USD
GBP / THB

In little more than three weeks since breaking through 1.50 against the USD, the GBP is now testing its next psychological barrier of 1.60 in early European trading.

Even though 1.60 was broken this morning, albeit only for a couple of minutes, it may be a bit early to start counting the chickens as the chickens may actually still be coming home to roost

From Bloomberg: http://www.bloomberg.com/apps/news?pid= ... r=currency

Pound Rises to $1.60 First Time Since November as Stocks Rally

By Gavin Finch and Anna Rascouet

May 27 (Bloomberg) -- The pound rose, surpassing $1.60 for the first time in almost seven months, as optimism the worst of the financial crisis is over stoked demand for assets denominated in the British currency.

The pound rallied versus the euro as the FTSE 350 Banks Index advanced 2.1 percent. The yen fell against higher-yielding currencies such as the Brazilian real and Australian dollar as a rebound in U.S. consumer confidence drove stocks higher. The South Korean won tumbled after North Korea threatened military action and said it’s no longer bound by the 1953 armistice.

“The U.S. confidence numbers appear to have changed the mood of the market,” said Paul Robinson, a currency strategist at Barclays Capital in London. “We moved back to an optimistic view of the world.”

The pound rose to $1.6008 as of 8:34 a.m. in London, the highest level since Nov. 6, from $1.5926 yesterday. It was at 87.31 pence per euro, from 87.81 pence. The yen weakened to 95.26 per dollar, from 95.03 yen. The won declined to 1,269.35 per dollar, from 1,2662.88.

To contact the reporters on this story: Gavin Finch in London at gfinch@bloomberg.net; Anna Rascouet in London at arascouet@bloomberg.net

Last Updated: May 27, 2009 03:48 EDT

Transfered some pounds in today ready for a visa renewal. Got 54.44 nett.Bangkok Bank.

At the close of business (in Thailand) yesterday the GBP has risen a total of 22.1% against the USD and 19.1% against the THB since its low point earlier this year; despite this, the GBP still has a long way to go to recover all of its losses from the last twelve months.

From the opening of business in Europe yesterday the GBP suffered from profit taking (despite some reasonable economic news) - falling over 2% from its intraday peaks against the USD and THB (by 4 cents and 1.3 Baht respectively).

This can be seen quite clearly in these intraday charts from the BBC for the GBP/USD and the GBP/THB:

GBP / USD

GBP / THB

Today the Monetary Policy Committee of the BoE is concluding its two day meeting – I’m not expecting any change, but if there were to be one in my opinion it should be a 0.25% rate increase.

The rate cuts have proved to be fairly useless as the banks, instead of using the cuts as intended to help minimise the impact of the recession on their customers (and the economy as a whole), used them primarily as an opportunity to increase their interest rate spreads (and hence their profits) – unfortunately the UK is not alone in suffering from continued abuse by the very organisations that played such a major part in causing the problem in the first place.

PhilR wrote:....... the Thai Baht (is there any other Baht!)

I'm not aware of any other type - however it is possible Ron might have one or two colourful adjectives that he might be inclined to add when referring to it

aznyron wrote:how can you say it soars when your only getting 56 I remember when you got 72 baht now if you comparing it with the USD or the Euro maybe you got a point but we live in Thailand & we use the Thai Baht
when it get to 70 then I think you can make that statement

When earlier this year we were getting a miserly 47 to the pound then I think todays 58 can accurately be described as soaring Ron. If in comparison to your dollar may I remind you at the low point the pundits were talking of "parity" with it. So again at 1.70 thats soaring mate.

aznyron wrote:how can you say it soars when your only getting 56 I remember when you got 72 baht now if you comparing it with the USD or the Euro maybe you got a point but we live in Thailand & we use the Thai Baht
when it get to 70 then I think you can make that statement

Ron, it was a comment in the text of the OP in May about "the pound soaring", I qualified it at the time with this post:

JimboPSM (on Wed May 06, 2009 5:56 pm) wrote:
It rather depends on the point that you are measuring its value from as to whether it has soared or not.

For instance, compared to the beginning of January 2008, the GBP is substantially lower and today 6th May 2009 according to my records it is only:

75.8 % of where it was against the USD

79.2 % of where it was against the THB

83.5 % of where it was against the EUR

From my perspective it has not soared; at best, it has recovered a little of what it lost

Updating the percentages above comparing where it was at the beginning of January 2008 to 4th August 2009, the GBP is still only:

85.2 % of where it was against the USD

86.0 % of where it was against the THB

86.8 % of where it was against the EUR

It is still not exactly soaring or in a full recovery but looking on bright side, it is much better than it was a few months ago

The lowest relative points for the GBP this year against the beginning of January 2008 were on 23rd January 2009 , they were: 68.1% against USD, 70.6% against THB and 77.7% against the EUR