lorenzo63
Age quod Agis
Un' interessante articolo che parla della debolezza della sterlina
...ed allarga poi lo scenario alle ipotesi future, dove sembrerebbe che stante la forte dipendenza dal settore finanziario, l' economia Uk sia particolarmente debole con riflessi sul valore della sterlina che è previsto al ribasso...
After wobbling for the past few weeks, the British pound nose-dived in the wake of weaker-than-expected economic news, raising the prospect that the U.K. currency could be in for a renewed bout of weakness against major currencies.
U.K. industrial production declined in August, undercutting optimism about a swifter-than-expected economic recovery. That news helped drive share prices higher, partly on the expectation that policy makers would have to keep monetary conditions excessively easy for some time in order to ensure economic recovery. That domestic stance, of course, undercuts the attractiveness of the pound to foreign-exchange investors.
The tough U.K. economic news coincided with a short-term rate increase by the Australian central bank, the first Group of 20 nation to raise rates since the financial crisis intensified more than a year ago. That move boosted the Australian dollar to its strongest level against the pound since 1985.
Similar to how investors sorted good banks from bad banks earlier this year, foreign-exchange buyers are starting to sort strong currencies from weaker currencies. The pound appears to be joining the dollar in the weak camp. Both countries have near-zero interest-rate targets, an aggressive policy aimed at boosting the economy, and yawning deficits. The euro and Japanese yen have edged higher, and so-called commodity currencies, such as the Canadian and Australian dollars, seem the most strongly positioned. Oil-rich Norway is also in the favored camp, and its central bank is expected to follow Australia with a rate increase soon.
Not all countries are pleased with how the sorting is unfolding, and intervention in the currency markets has increased substantially in the past few weeks. While central banks didn't confirm such moves, traders believe South Korea, Thailand and Singapore intervened Tuesday to slow their currencies' rise against the dollar. Switzerland is believed to have made a similar move last week, and Japan has spoken loudly about taking its own steps to arrest the yen's gains.
While the dollar's weakness is getting most of the attention, the pound may face an even bleaker future than the greenback.
Investors speculate that U.K. officials may favor a weaker currency and could take additional measures to boost Britain's ailing economy.
In the third quarter, sterling lost 2.9% of its value against the dollar and gave up 6.9% against the euro, reversing a positive second quarter in which it rebounded from multiyear lows against the dollar and euro. After trading as high as $1.70, the pound was at $1.5909 late Tuesday in New York, down from $1.5944 late Monday, around the low end of its recent range.
A weaker pound is adding to consternation among euro-zone exporters. Already dealing with a weak dollar, now these countries face the prospect that the pound will also fall hard against the euro. That would make euro-zone exports to the U.K., the zone's biggest trading partner, relatively more expensive. That scenario could hamstring Europe's own ability to recover from the recession.
Investors again are focusing on the U.K.'s heavy dependence on the financial sector and how that part of the economy faces a long, torpid recovery, at best. Unlike the Reserve Bank of Australia, the Bank of England isn't expected to raise short-term rates anytime soon. Indeed, it is mulling even more aggressive moves to ease monetary conditions in a bid to boost the economy.
The U.K.'s elections, which must be held before next June, could add to market uncertainty as political squabbling intensifies ahead of the vote. "Foreign investors are taking fright," says Stuart Thomson, an economist at Ignis Asset Management in Glasgow, who says sterling could hit $1.51 by year-end and the euro could rise to 95 pence from 92.61 pence midday Tuesday in New York.
But other observers remain upbeat about the pound's future. "It is not surprising that there are stress fractures in the U.K. But the pound is an international reserve currency, and London is still the financial center of the world," says Stephen Jen, managing director at BlueGold Capital Management LLC in London, who says sterling is undervalued. If the euro keeps rising against the pound and dollar, it could become a major problem for Europe's economies in coming months. The region's biggest economy, Germany, depends heavily on exports to fuel growth, while smaller economies like Spain and Ireland are also hoping that exports could help revive growth.
And there are reasons to be especially concerned about the U.K., some observers say.
The U.K. currency's downdraft picked up steam in early August, when the Bank of England surprised investors by expanding the size of a program to pump cash into the economy despite tentative signs of economic improvement. Many believe the Bank of England may move to expand the program again, possibly in November. Meanwhile, Bank of England Gov. Mervyn King has said that weaker sterling and lowering interest rates on reserves held at the central bank might be helpful for the U.K. economy, something markets interpreted last month as a sign the central bank is still worried about the economic recovery. The Bank of England's next policy meeting begins Wednesday.
Thanos Papasavvas, head of currency management at Investec Asset Management, says much of the zigzagging in the U.K. currency is because investors have been whipsawed so many times during the financial crisis. Some may have missed out on sterling's rally earlier this year, then bought the currency as it neared its highest levels. They may now be looking for opportunities to get out of those positions, suggesting the pressure on the pound may be short-lived
...ed allarga poi lo scenario alle ipotesi future, dove sembrerebbe che stante la forte dipendenza dal settore finanziario, l' economia Uk sia particolarmente debole con riflessi sul valore della sterlina che è previsto al ribasso...
After wobbling for the past few weeks, the British pound nose-dived in the wake of weaker-than-expected economic news, raising the prospect that the U.K. currency could be in for a renewed bout of weakness against major currencies.
U.K. industrial production declined in August, undercutting optimism about a swifter-than-expected economic recovery. That news helped drive share prices higher, partly on the expectation that policy makers would have to keep monetary conditions excessively easy for some time in order to ensure economic recovery. That domestic stance, of course, undercuts the attractiveness of the pound to foreign-exchange investors.
The tough U.K. economic news coincided with a short-term rate increase by the Australian central bank, the first Group of 20 nation to raise rates since the financial crisis intensified more than a year ago. That move boosted the Australian dollar to its strongest level against the pound since 1985.
Similar to how investors sorted good banks from bad banks earlier this year, foreign-exchange buyers are starting to sort strong currencies from weaker currencies. The pound appears to be joining the dollar in the weak camp. Both countries have near-zero interest-rate targets, an aggressive policy aimed at boosting the economy, and yawning deficits. The euro and Japanese yen have edged higher, and so-called commodity currencies, such as the Canadian and Australian dollars, seem the most strongly positioned. Oil-rich Norway is also in the favored camp, and its central bank is expected to follow Australia with a rate increase soon.
Not all countries are pleased with how the sorting is unfolding, and intervention in the currency markets has increased substantially in the past few weeks. While central banks didn't confirm such moves, traders believe South Korea, Thailand and Singapore intervened Tuesday to slow their currencies' rise against the dollar. Switzerland is believed to have made a similar move last week, and Japan has spoken loudly about taking its own steps to arrest the yen's gains.
While the dollar's weakness is getting most of the attention, the pound may face an even bleaker future than the greenback.
Investors speculate that U.K. officials may favor a weaker currency and could take additional measures to boost Britain's ailing economy.
In the third quarter, sterling lost 2.9% of its value against the dollar and gave up 6.9% against the euro, reversing a positive second quarter in which it rebounded from multiyear lows against the dollar and euro. After trading as high as $1.70, the pound was at $1.5909 late Tuesday in New York, down from $1.5944 late Monday, around the low end of its recent range.
A weaker pound is adding to consternation among euro-zone exporters. Already dealing with a weak dollar, now these countries face the prospect that the pound will also fall hard against the euro. That would make euro-zone exports to the U.K., the zone's biggest trading partner, relatively more expensive. That scenario could hamstring Europe's own ability to recover from the recession.
Investors again are focusing on the U.K.'s heavy dependence on the financial sector and how that part of the economy faces a long, torpid recovery, at best. Unlike the Reserve Bank of Australia, the Bank of England isn't expected to raise short-term rates anytime soon. Indeed, it is mulling even more aggressive moves to ease monetary conditions in a bid to boost the economy.
The U.K.'s elections, which must be held before next June, could add to market uncertainty as political squabbling intensifies ahead of the vote. "Foreign investors are taking fright," says Stuart Thomson, an economist at Ignis Asset Management in Glasgow, who says sterling could hit $1.51 by year-end and the euro could rise to 95 pence from 92.61 pence midday Tuesday in New York.
But other observers remain upbeat about the pound's future. "It is not surprising that there are stress fractures in the U.K. But the pound is an international reserve currency, and London is still the financial center of the world," says Stephen Jen, managing director at BlueGold Capital Management LLC in London, who says sterling is undervalued. If the euro keeps rising against the pound and dollar, it could become a major problem for Europe's economies in coming months. The region's biggest economy, Germany, depends heavily on exports to fuel growth, while smaller economies like Spain and Ireland are also hoping that exports could help revive growth.
And there are reasons to be especially concerned about the U.K., some observers say.
The U.K. currency's downdraft picked up steam in early August, when the Bank of England surprised investors by expanding the size of a program to pump cash into the economy despite tentative signs of economic improvement. Many believe the Bank of England may move to expand the program again, possibly in November. Meanwhile, Bank of England Gov. Mervyn King has said that weaker sterling and lowering interest rates on reserves held at the central bank might be helpful for the U.K. economy, something markets interpreted last month as a sign the central bank is still worried about the economic recovery. The Bank of England's next policy meeting begins Wednesday.
Thanos Papasavvas, head of currency management at Investec Asset Management, says much of the zigzagging in the U.K. currency is because investors have been whipsawed so many times during the financial crisis. Some may have missed out on sterling's rally earlier this year, then bought the currency as it neared its highest levels. They may now be looking for opportunities to get out of those positions, suggesting the pressure on the pound may be short-lived
