USDGBP, pound fights back

[aussielong]

http://au.finance.yahoo.com/q/bc?s=USDGBP=X&t=3m

The pound has seriously come back in the last few days against the greenback?

How come?

[Gonzo]

On Bloomberg yesterday

The pound advanced for a fourth day against the dollar after the Financial Times reported yesterday that Bank of England Markets Director Paul Fisher said policy makers would be more likely to suspend asset purchases, giving themselves the option of “doing more later.” Rising asset prices and improved confidence may signal the program is working, Bank of England Deputy Governor Charles Bean said this week.

Sterling climbed 0.5 percent to $1.6342, on course for a 3.1 percent weekly advance, its biggest since May 22. It also strengthened to 91.06 pence per euro, from 91.86.

The pound is “undervalued” as the currency market is underestimating the potential for rate increases by the Bank of England, according to Deutsche Bank AG, the world’s biggest currency trader.

http://www.bloomberg.com/apps/news?p...d=amFCO0G0Lx6o

Essentially there has been some positive news from the Bank of England that further Quantitative Easing measures may not be required and if that were to prove the case then the traders think the GBP is currently undervalued.

The pound will be worth much more next year when inflation results in 1970s style interest rates.

[aussielong]

On Bloomberg yesterday



http://www.bloomberg.com/apps/news?p...d=amFCO0G0Lx6o

Essentially there has been some positive news from the Bank of England that further Quantitative Easing measures may not be required and if that were to prove the case then the traders think the GBP is currently undervalued.

The pound will be worth much more next year when inflation results in 1970s style interest rates.

Hmm.. so this could be a correction then, and it will continue to slide but more slowly. Most reports i've read have said the pound will slide for another 12 months.

QE may not lead to the levels of interest rates you indicate, if it has mainly offset deflation.

I'm seriously thinking of buying a lot of pounds next week.
If it gains another 5% against the major ccy's i'm defo getting in.

[Lockhouse]

So I'm off to the US in Feb, do I buy my currency now?

[ChimpMaster]

It's a technical correction and driven by short covering.

The downtrend will resume in a few days.

[AtW]

It's a technical correction and driven by short covering.

Gone up by 3% in a few days - that's a lot of covering going on...

[Sysman]

The pound will be worth much more next year when inflation results in 1970s style interest rates.

Quite possibly. That will definitely hurt those who are already stretched on their mortgage payments.