The Pounds Recovery?

by **davecryan** » February 2, 2011, 7:28 pm

Whats happening ? Its been a long time since the Pound was on a roll against the rest of the world.
Possible rise in Interest Rates, maybe ?

Pound Sterling - Thai Baht

£1 buys change % 52 wk-h 52 wk-l
Thai Baht 49.97970 +0.15330 +0.31 52.95150 46.40030

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Asia Pacific
£1 buys change % 52 wk-h 52 wk-l
Japanese Yen 132.00500 +0.67500 +0.51 145.24000 125.75500
Australian Dollar 1.60350 +0.00740 +0.47 1.82210 1.51650
New Zealand Dollar 2.07290 +0.00710 +0.34 2.29220 2.00130
Hong Kong Dollar 12.61150 +0.03500 +0.28 12.61200 11.17750
Singapore Dollar 2.06120 +0.00970 +0.47 2.25060 1.98780
Taiwanese Dollar 47.07280 +0.14410 +0.31 51.21340 44.88850
Thai Baht 49.97970 +0.15330 +0.31 52.95150 46.40030
Malaysian Ringgit 4.94740 +0.00400 +0.08 5.47130 4.61670
Indonesian Rupiah 14647.97860 +54.38690 +0.37 14942.08850 13050.95650
South Korean Won 1804.71520 +7.15280 +0.40 1869.74060 1643.51750
Philippine Peso 71.40400 +0.11350 +0.16 74.33240 64.79490
Vietnamese Dong 31588.75480 +117.28680 +0.37 31706.12670 27231.41920
Chinese Yuan 10.62800 -0.02060 -0.19 10.90750 9.78750

South Asia
£1 buys change % 52 wk-h 52 wk-l
Indian Rupee 73.93660 +0.60550 +0.83 73.68800 65.41250
Bangladeshi Taka 115.28000 +0.55000 +0.48 114.76000 99.55500
Pakistani Rupee 138.60490 +0.40160 +0.29 139.37030 121.14900
Sri Lankan Rupee 179.69700 +0.86090 +0.48 183.24950 163.07600

Europe / Africa / Middle East
£1 buys change % 52 wk-h 52 wk-l
Euro 1.17390 +0.00660 +0.57 1.23560 1.09670
Danish Kroner 8.75100 +0.04900 +0.56 9.20550 8.16100
Israeli Shekel 5.95650 +0.00610 +0.10 6.00750 5.43970
Norwegian Kroner 9.27450 +0.07180 +0.78 9.80840 8.79000
Saudi Arabian Riyal 6.07700 +0.02260 +0.37 6.10270 5.37580
South African Rand 11.56740 +0.07180 +0.63 12.18030 10.23690
Swedish Kronor 10.41450 +0.13450 +1.31 11.75400 10.25000
Swiss Franc 1.52060 +0.01070 +0.71 1.69510 1.44280
Turkish Lira 2.55720 +0.00900 +0.35 2.56890 2.22580
Iranian Rial 16816.00910 +85.03730 +0.51 16922.95190 14266.46570
Ukrainian Hryvnia 12.88180 +0.04780 +0.37 12.96720 11.36390
Russian Rouble 47.74500 +0.12000 +0.25 50.02030 43.74540

The only minus is against the Chinese Yuan

by **arjay** » February 3, 2011, 7:59 am

The £ sterling touched 50 baht to £1 yesterday and 1.62 to the US Dollar, and probably will again today.

Some of the reasons can be seen here:

http://www.bbc.co.uk/news/business-12343459

by **BobHelm** » February 3, 2011, 10:12 am

There is also a reason tucked away in this report on Manufacturing Output RJ.
http://www.bbc.co.uk/news/business-12333426
Although it is headed

US manufacturing output accelerates

& discusses what are looking to be favourable January figures, it then goes onto discuss Euro zone figures which it says also are showing a positive trend. However the last paragraph also says this..

Manufacturing in the UK, which is not a member of the eurozone, expanded at its fastest pace since records began in 1992, according to a survey released by the Chartered Institute of Purchasing and Supply.

I see this rise in manufacturing output as especially significant, given the amount of manufacturing that has been moved to China in the last few years. That American & European manufacturers are going through a period of growth maybe suggests that they have found the secret 'added value' that is not low cost based that caused the move.....well we can all hope so anyway!!

by **Galee** » February 9, 2011, 7:55 pm

Forex focus: sterling turns the corner

http://uk.finance.yahoo.com/news/Forex- ... 00371.html

by **siddiq** » February 10, 2011, 3:25 am

Based on an anticipation that the UK will be the first to raise its interest rates? I recently read an interview with Mervyn King where he said that it was in the nation's interests to control consumer spending on the High Street. Will people be less inclined to spend if inflation is raised or will a hike in interest rates check that?

by **lepidoptra** » February 10, 2011, 11:15 am

Mervyn King should have increased the interest rate long ago. Yes it may affect people with mortgages but isn't everyone suffering anyway with high inflation. The governments boasts that the weak pound is good for the country makes no sense. The imports have become so much dearer which is obviously hitting UK consumers. Raise interest rates now and we maybe will see a recovery in the value of the pound. That of course will help people who reside here who rely on transfer of funds from the UK. I have seen a 38% drop in my income(pension) since the pound has dropped so much against the Thai baht in the last 4 or 5 years

by **Zidane** » February 10, 2011, 12:01 pm

The pound is nudging 50 which is an improvement of its lousy rates of 45 or 46 a month or two back but still not worthy of popping the champagne corks !
If they increase the interest rates hopefully it could rise to around 55.Not great compared to what it was just over a couple of years ago but probably the best us Brits can hope for.

by **arjay** » February 10, 2011, 7:10 pm

The BOE didn't raise UK Int rates today, much as had been expected. The consensus seems to be that it should and will hold its nerve for several more months yet. My thinking would be until at least the 3rd quarter of the year. It's the fact that rates will rise, sooner or later, that is helping the pound, along with other things (like GB getting to grips with its debts = austerity measures).

by **JimboPSM** » June 23, 2011, 6:34 pm

UK forum members may have noticed a particularly sharp fall in the GBP yesterday which has carried on today.

This was almost wholly due to the issue of the Bank of England minutes in which it was discovered that the new member of the MPC (former Goldman Sachs economist Ben Broadbent) voted against an interest rate increase - which is the opposite way to the recent voting record of his predecessor Andrew Sentance.

The vote against an increase was 7 – 2.

In the markets this was taken as an indication that an increase in UK interest rates is now rather further away than previously thought.

In broad terms UK economic data over the last few weeks, while not particularly brilliant, has in general been beating expectations on the positive side.

In comparative terms it had seemed to me that during this period the UK was actually doing less worse (it’s hard to call current performance better) than many of its peers.

So, with the exception of the impact of the BoE minutes, I find the recent performance of the GBP somewhat confusing

June (so far) has been a poor month on the forex markets for the GBP, with the buy/sell average rate at business close today in Thailand down by 3.4% at 48.8 against the THB and 3.2% at 1.600 against the USD.

by **davecryan** » June 23, 2011, 6:54 pm

There's talk about interest rises being deferred to May or even Sept 2012.
And even worse....printing more funny money, I think that they are trying to 'inflate ' our deficit away.
Source) Daily Telegraph 23.June

by **JimboPSM** » August 20, 2011, 12:06 pm

While one month doth not a deficit end, the UK figures for public sector borrowing are a marked improvement and bode well for an improved longer term value of the GBP (while prospects for growth in jobs and the economy unfortunately will lag well behind the deficit improvement).

From BBC Business:

UK public sector borrowing sees big fall in July

Public sector net borrowing (PSNB) in the UK during July was just £20m, down from £3.5bn a year earlier, helped by higher tax receipts and the levy on banks' balance sheets.

July's PSNB figure was better than analysts' forecasts.

The PSNB total since the start of the financial year in April now stands at £40bn.

The Office for Budget Responsibility (OBR) forecasts that PSNB will total £122bn in 2011-12.

The levy on banks' balance sheets brought in an extra £660m in the month.

Larger corporation tax receipts and lower spending by local government also helped to improve the public finances.

Improving trend

The coalition government and Chancellor George Osborne have pledged to eliminate the UK's budget deficit by 2015. The deficit hit 11% of GDP last year.

But growth in the economy has been weak since autumn 2010 and some economists have expressed doubts whether the government can meet its target.

However, analysts said July's borrowing figures were encouraging.

"Revenues are stronger, spending growth has slowed as it should do," said Michael Saunders at Citi.

"The deficit won't fall as quickly as I'd hoped six months ago, but it is still clearly falling, and that's in quite marked contrast to other high deficit countries.

"The UK is the only high deficit country that is on the way back to fiscal sustainability."

'On course'

And David Kern, chief economist at the British Chambers of Commerce (BCC), said the borrowing figures for July were much better than expected.

"Though it is still possible that the government may overshoot the borrowing target for the year, any excess is likely to be small and considerably less than might have been expected," he added.

"Making allowances for lower growth and for the worsening international background, the government's deficit-cutting programme is still on course."

Original article: http://www.bbc.co.uk/news/business-14586471

While the figures are much improved, I am actually less optimistic about the speed of the recovery of the UK economy itself. UK corporates are producing some pretty good numbers, but on closer examination there appears to be an increasing proportion of those numbers which are generated in other economies.

The implications of this are that there is an increasing disconnect between the performance of UK corporates and the performance of the UK economy itself.

While many of those corporates have improved their performance quite markedly, in my opinion that performance has not proportionately “trickling down” to the UK economy itself either by way of jobs and wages to UK employees or as an improvement to the UK Treasury coffers by way of both direct and indirect taxation generated by their activities.

From the mass of economic information that is available, it appears to me that any imminent expectations of recovery to the kind of growth rates that we have experienced in the past are excessively optimistic.

While not wishing to appear unduly pessimistic, following the restructuring of the manufacturing base (which I perceive as the engine room for real growth) over the last couple of decades by exporting many manufacturing jobs to Asia I can’t see any evidence that the next few years will have anything much more than a zero growth rate.

Without growth in the economy (which is a subject on which no responsible government should ever speak for danger of creating a self-fulfilling prophecy) the moves by the UK government to try and reduce its deficit by the combination of cuts in spending and increases in taxation have the appearance (so far) of mathematically proving to be correct.

While I hope that I am wrong about my interpretation of the prospects for growth, I can see no compelling evidence that contradicts my fears

The Pounds Recovery?

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Re: The Pounds Recovery?