Last Month I picked out a prediction about the pound hitting parity with the Euro, because I was shocked to read it.
Today I found a similar doomy outlook from Jane Foley, Research Director, Forex.com, written a couple of weeks ago:
"the recent rapid drop in the value of the pound has raised speculation that euro-sterling could see parity again in the not too distant future"
(Source: City A.M)
Today's rate is 1.0643 -
That is not far off parity. Only Two years ago, in October 2007, the rate was 1.4367.
Then your Euro cost you about 70p. Taking a hit of 30 pence in every pound has certainly changed my plans to travel abroad. Has it affected yours?
I am not good at figuring this data, but it seems to me that apart from the visible hikes in taxation, we are faced with eye-watering "taxes" on travel abroad, due to the weak pound, which is after all, deliberately weakened by fiscal policy.
Perhaps an economist can enlighten us.
2 comments:
As one ignorant of all economics all I see is the pound becoming the Euro de facto, without the political inconvenience of calling it that.
There are bigger things going on than the old-fashioned among us who believe in self-determining nation states with their own currencies governed by elected representatives can possibly influence.
The nation state, in the European sense, has been finished for a long time. Our representaives do no more now than take it in turns to provide a veneer of policy change and public accountability, a fiction, an Aunt Sally, to give us something to rail at while the real business goes on unseen. Thus far, are still allowed to be rude about our 'leaders' in public. Thus far, they tolerate that as a safety valve, the price of keeping us in ignorance of what is really coming.
Bigger things are what is coming, and I suspect we're going to like the way things wil be soon a lot less than we like things now.
It's bein' so cheerful as keeps me goin'.
No Econoist me but, this is an extract from a financial newsheet dated 17th September.
I bank, at the moment with BNP Parisbas and the comments of the PDG to internal memos about the predicted slide of the £ was widely reported in France
17 Sep 2009, 08:52 GMT by Finotec
Home : Forex News : The Pound may drop to parity against the Euro and the dollar
The Pound may drop to parity against the Euro and the dollar
The Bank of England and Federal Reserve are flooding their financial systems with cash to keep borrowing costs low on expectations their economies will recover slowly from recession
EUR/USD USD/JPY GBP/USD USD/CHF
Resistance 1.4910(M)
1.4865(M)
1.4825(M) 92.70(M)
91.95(M)
91.65(M) 1.6695(M)
1.6660(M)
1.6590(M) 1.0420(M)
1.0370(M)
1.0330(M)
Support 1.4690(M)
1.4615(M)
1.4560(M) 90.10(M)
89.70(M)
88.85(M) 1.6455(M)
1.6400(M)
1.6355(M) 1.0280(M)
1.0140(M)
1.0015(M)
The euro will surge to parity versus the pound and reach its highest level in more than a year against the greenback as investors borrow low-cost funds in the U.K. and U.S. to buy higher-yielding assets, BNP Paribas SA said. The Bank of England and Federal Reserve are flooding their financial systems with cash to keep borrowing costs low on expectations their economies will recover slowly from recession. That will spur investors to use funds from the nations to buy securities in countries with higher interest rates, BNP Paribas said. “Sterling is likely to be the weakest currency in town followed by the U.S. dollar,” analysts led by Hans Guenter Redeker, London-based global head of currency strategy at BNP Paribas, wrote in a note to clients yesterday. “The U.S. dollar has been used as a funding and a reserve currency simultaneously, suggesting the U.S. dollar will depreciate less than sterling.” The EUR/GBP is trading at 0.8910 as of 8:52am, London Time.
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