The troubled pound | Forex Factory

  • The troubled pound

    From forexcrunch.com

    These days it is very difficult to find much that is positive to say about the pound. Yesterday’s MPC Minutes put the knife a little deeper into the British economy, with a number of MPC members expressing fears that an increase in the policy rate now “could adversely affect consumer confidence”. Furthermore, there were still fears over the downside risks to household spending. The labour market data released at the same time as the MPC minutes showed a fairly lacklustre picture. For the third time in four months, the claimant count measure of unemployment increased in April. Just as worrying, underlying ... (full story)

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Yohay
May 19, 2011 6:18am
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Thanks for your comments. News impacts currencies for different periods of time. I remain bearish on the pound. The economy is still weak, and a rate hike will make it weaker. The chances for a rate hike are indeed higher with stronger retail sales and higher inflation published this week, but it's important to remember that the most hawkish member in the MPC, Andrew Sentance, is leaving the committee, and he's replaced by a more moderate person.
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Yohay
May 19, 2011 7:09am
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I certainly agree with bobn and justchilas. I would add that the retreat of commodity prices in May (following Trichet's soft stance on inflation) will help cool some of the inflationary pressures in Britain as well.
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willf
May 22, 2011 4:26am
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If rates go up it will make little difference in my opinion. Even though rates are at an all time low very few people can get a mortgage anyway. And in real terms you can't get a mortgage below 4% unless you are a new buyer and may get 3% for two years.

BOE rates and what you can actually get are so disconnected compared to four years ago. Until banks start to lend again the UK housing market will be stagnated.
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bobn
May 19, 2011 6:39am
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A well observed summary of the UKs problems. Ever since January people have talked of rate rises (predicted first for April, then May then ... now predicted for November). It hasn't happened due to the debt sunk mess that is the UK economy (only different to the PIIGS in that it can devalue). The BoE knows all this and thus rates haven't risen. So other than a longshot wish for a rate rise eventually - what is there to be bullish about Pandora?
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PandoraBox
May 19, 2011 5:53am
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Pound from my view in Bullish mode bro. Just waiting rise rate....
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Dane
May 19, 2011 5:14am
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Hey,

Every week there's a new story breaking. I have seen traders buying into news only to be disappointed. What will it be next week, the Pound regains on Euro concerns?

Dane
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damo
May 19, 2011 5:36am
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Every time you write some fairy tale, the opposite happens. Wake up and look at the price. If you really traded you wouldn't believe your own crap.
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justchilas
May 19, 2011 6:54am
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the pound is goin to be troubled for sometime because with a weak economy, low household spending n income,not so bouyant housing the BOE cannot raise interest notwithstanding the inflation
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