What is the pound likely to do against the Euro in the coming weeks?
I have to buy about 4,000 euros worth of equipment from Lithuania. The slump of the pound has cost me a few hundred quid in the last couple of weeks, so I’m not a happy bunny.
Does anyone know what is most likely – the pound continuing to plummet, in which case I should pay for the stuff as soon as possible, or the pound regaining some value, in which case I should hang on to my cash as long as possible?
Extra tags:
- eurogbp exchange rates in northernireland banks,how is the £ going to perform against euro in coming weeks,is the pound likely to do against the euro in the coming weeks,is the value if the pound likely,what is the pound likely to do against the euro
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Tagged with: happy bunny • slump
Filed under: Currencies
Many people would like to know this answer, including quite a few international speculators who have the power to force the result and then feed from it.
One school says that the Euro is overvalued against the pound in terms of what each can buy. This does tend to undermine the spirit of the Single Market in the EU, and cannot be tolerated for long by the politicians. The correction can be achieved by introducing trade tariffs (unlikely) or putting up with border hopping within the EU (so buy shares in cross-Channel operators), or by an upward correction of the pound against the euro, or by inflation in the UK.
Traditionally the Euro economies have discouraged the sort of wild swing speculation which characterises the Anglo-American economic model, in favour of more boring stability that favours industry. They are therefore in a better position to exploit a currency devaluation by notching up exports. The UK sadly has lost its manufacturing capacity concentrating instead on the Service and Retail sectors which are hit when the currency devalues. Until there is less spending and more investment, the British economy will be hit further by this devaluation, so it could be some time before our economy is healthy again. My guess therefore is that prices in the UK will rise and the pound will fall below parity with the euro. This will not happen immediately, but in about six months, when most of the British supply network has gone bust, and real shortages in whatever shops are left start to push up prices. Interest rates can then rise and encourage investment in the pound at the expense of widespread destitution in the UK, which can either be allowed to happen or money printed to pay welfare which can only then depress the pound further, and push up inflation to 1970s levels.
This assumes that some Government or big business initiative will not rescue the British economy, or that something unpleasant doesn’t happen in Euroland. Gordon Brown at the moment is telling us that the answer is retail therapy by those lucky enough to be in work, and a kick up the backside for those who have lost their jobs. The Keynesian response that got us out of the 1930s Depression, combined with Thatcherite populism which wins it electoral support from the Tabloid Consumer majority.
Unfortunately, I think it was all this designer spending with resources we simply do not have which got us into this mess. The Archbishop of Canterbury may not make himself popular, but I fear he is right. Unless New Labour has another answer, then we must wait for a change of Government and then two years more before anything can be done. This puts us in 2012, which I think is the year the British economy will pick up again, but only if we are sensible about investment now.
The scary thing about my predictions is that a year ago, I was with everyone thinking that oil would be $200 a barrel by now!
So with the Lithuanian purchase, it is a gamble. The sensible thing would be to factor in the currency exchange loss if the pound recovers against the loss in prevaricating. If it holds up the business and prevents you from grabbing an opportunity to make money from the weak pound, then to hell with the cost and go for it.
Kick it’s ass hopefully
In my very humble opinion.
I think it will continue to slide into January and possible dip below the pound for a short period.
I think it will then begin to rally and end 2009 at about 1.25.
My advice is hang on if you can.
Forget Lithuania I will sell it you for 3000 send me the cheque now and I will get it to ya before xmas eve.err make that cash.used notes.
It appears you are not trading foreign currency on regular basis.Exchange rates are of prime concern in forex trading.
As far as exchange rates for a case such as yours-selling a thing-it is preferable you contact the local banks for the exchange rates.Forex market is very volatile and as such it would get only difficult to find out the right rates.Similarly, in the case of getting currency converted into another, for traveling etc, it is rather recommended to take help from the local banks.I have been trading forex for close to four years now thro AVAFX.
hhhhaa sucker