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The Pound takes a hammering ..... again!

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Re: The Pound takes a hammering ..... again!

Postby Paphitis » Wed Oct 05, 2016 1:22 pm

In addition, people make the mistake in looking at currency values as some kind of measure for economic performance. It's NOT. Much better to look at unemployment figures or the FTSE.

If it was, then why isn't the Dutch, Australian and Swiss currencies the strongest in the world. They have the strongest economy in the OECD so shouldn't those currencies be strong?

The answer is NO. Particularly in Australia's case which is a commodity exporter.

The opposite is true. An expensive AUD generally has adverse affects on the economy. A lower AUD is seen to be advantageous to competitiveness. If Australia had Cyprus Pound values, then the economy would be in meltdown because it wouldn't be able to sell all its commodities.
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Re: The Pound takes a hammering ..... again!

Postby Maximus » Wed Oct 05, 2016 3:43 pm

Paphitis wrote:
Maximus wrote:Here is GBP compared to some other major currencies. (USD, EUR, AUD, CHF, NZD, CAD)

It never recovered. The trend for the GBP has been down since 2008


Once again you need to compare it to the EURO.

Comparing it to the AUD is pointless because the Australian Dollar is heavily influenced by commodity prices such as Gold, Iron, Coal, and Oil and the Sterling isn't.

If you compare it to the EURO you get an accurate picture of where the Sterling should be which is about 1.60 against the USD and 1.50 against the EURO.

Anything beyond that is just unrealistic and will only occur if the EU or the USA go bust.


You said earlier that you have to compare the GBP to many currencies and not jut the USD, so I did just that. I compared it to the Euro as well as 5 other major currencies.

For your information, in 2008, the GBP crashed against the euro as well and it practically reached parity. The GBP did recover most of that move over the few years following but the euro has nearly fully recovered all of that today. Today, we are targeting parity again!

Please check your facts. It was not the other way around as you are saying.
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Re: The Pound takes a hammering ..... again!

Postby Paphitis » Wed Oct 05, 2016 3:54 pm

Maximus wrote:
Paphitis wrote:
Maximus wrote:Here is GBP compared to some other major currencies. (USD, EUR, AUD, CHF, NZD, CAD)

It never recovered. The trend for the GBP has been down since 2008


Once again you need to compare it to the EURO.

Comparing it to the AUD is pointless because the Australian Dollar is heavily influenced by commodity prices such as Gold, Iron, Coal, and Oil and the Sterling isn't.

If you compare it to the EURO you get an accurate picture of where the Sterling should be which is about 1.60 against the USD and 1.50 against the EURO.

Anything beyond that is just unrealistic and will only occur if the EU or the USA go bust.


You said earlier that you have to compare the GBP to many currencies and not jut the USD, so I did just that. I compared it to the Euro as well as 5 other major currencies.

For your information, in 2008, the GBP crashed against the euro as well and it practically reached parity. The GBP did recover most of that move over the few years following but the euro has nearly fully recovered all of that today. Today, we are targeting parity again!

Please check your facts. It was not the other way around as you are saying.


No I don't think that is accurate. You can't compare it to USA or Australia. Probably not Canada either.

These are commodity currencies. Especially the AUD which can only be compared to other resource rich countries perhaps.

We are talking about BREXIT from the EU. So best to compare them to the EU.

If you want a good measure of the British Economy then look no further than unemployment levels. They had a peak of 8.2% a few years ago due to the GFC and are now at 5.4% which is one of the lowest figures in the EU. In other words, the U.K. Is doing better than most.

The value of the Sterling is largely irrelevant.
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Re: The Pound takes a hammering ..... again!

Postby Maximus » Wed Oct 05, 2016 4:05 pm

You twist and turn like a tagliatelle salad. As if you forgot what you said only a couple of posts ago. Some of what you are saying is just not accurate either.

I'm out of this conversation Paphitis,
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Re: The Pound takes a hammering ..... again!

Postby Paphitis » Wed Oct 05, 2016 4:37 pm

Maximus wrote:You twist and turn like a tagliatelle salad. As if you forgot what you said only a couple of posts ago. Some of what you are saying is just not accurate either.

I'm out of this conversation Paphitis,


I'm not twisting and turning. You are just too fixated with wishing Britain will just slide into the abyss. Why I have no idea. It's a bit childish to hold these grudges. Many countries have moved on from far worse things and Britain is not responsible for our situation. We need to take a lot of the responsibility too, not just blame others.

If you want to gain satisfaction from other people's despair then you need to look at unemployment rates, property prices, and consumer expenditure in order to satisfy yourself of the health or ills of the British economy. And those figures don't really portray a weak economy. Quite the opposite as a matter of fact.

The value of the Sterling is largely irrelevant let alone it's artificial value during BREXIT, which is unprecedented set of circumstances.
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Re: The Pound takes a hammering ..... again!

Postby Kikapu » Wed Oct 05, 2016 4:56 pm

Just going from memory and not bothering looking at the charts, when I first went to the states in 1979, £1 = $2.5

In the early 1990's, £1 = $1

By mid 90's, it was, £1 = $2

Since then, the £££ has steadily been going down to what it is today, £1 = $1.27

The £££ will get down to parity with the $$$ eventually.

History seems to be repeating itself when it comes to the £ - $ currency.
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Re: The Pound takes a hammering ..... again!

Postby Maximus » Wed Oct 05, 2016 5:05 pm

Paphitis wrote:
Maximus wrote:You twist and turn like a tagliatelle salad. As if you forgot what you said only a couple of posts ago. Some of what you are saying is just not accurate either.

I'm out of this conversation Paphitis,


I'm not twisting and turning. You are just too fixated with wishing Britain will just slide into the abyss. Why I have no idea. It's a bit childish to hold these grudges. Many countries have moved on from far worse things and Britain is not responsible for our situation. We need to take a lot of the responsibility too, not just blame others.

If you want to gain satisfaction from other people's despair then you need to look at unemployment rates, property prices, and consumer expenditure in order to satisfy yourself of the health or ills of the British economy. And those figures don't really portray a weak economy. Quite the opposite as a matter of fact.

The value of the Sterling is largely irrelevant let alone it's artificial value during BREXIT, which is unprecedented set of circumstances.


Where did you get all that from.

I do not wish the UK to slide in to the abyss and this has absolutely nothing to do with my opinion or the facts about the Cyprus problem.

In case you are not aware, because I have said this to you before. I am British. I am simply stating a fact that the GBP has weakened against all major currencies since 2008. Its a fact Paphitis.

All those economic indicators you mention get priced in relatively quickly after they are announced. Whatever the exchange rate is this is what the market thinks it is worth. whatever it is intrinsically worth is another matter but the GBP is not trading at its intrinsic value, which is also subject to change. It is trading at what the market percieves it to be worth. Dont argue with the market.

I still want to know where you would put your stop on that GBPUSD buy.....
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Re: The Pound takes a hammering ..... again!

Postby Maximus » Wed Oct 05, 2016 5:21 pm

Paphitis wrote:In addition, people make the mistake in looking at currency values as some kind of measure for economic performance. It's NOT. Much better to look at unemployment figures or the FTSE.

If it was, then why isn't the Dutch, Australian and Swiss currencies the strongest in the world. They have the strongest economy in the OECD so shouldn't those currencies be strong?

The answer is NO. Particularly in Australia's case which is a commodity exporter.

The opposite is true. An expensive AUD generally has adverse affects on the economy. A lower AUD is seen to be advantageous to competitiveness. If Australia had Cyprus Pound values, then the economy would be in meltdown because it wouldn't be able to sell all its commodities.


Currency values are a measure of a country's performance relative to another country.

The FTSE is traded in GBP's. It is not traded in ASX's, DAX's or Nasdaq's. :lol:

So I hear its cheaper for an Aussie to invest in the UK economy. How about for a Brit?
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Re: The Pound takes a hammering ..... again!

Postby Paphitis » Wed Oct 05, 2016 5:34 pm

Maximus wrote:
Paphitis wrote:In addition, people make the mistake in looking at currency values as some kind of measure for economic performance. It's NOT. Much better to look at unemployment figures or the FTSE.

If it was, then why isn't the Dutch, Australian and Swiss currencies the strongest in the world. They have the strongest economy in the OECD so shouldn't those currencies be strong?

The answer is NO. Particularly in Australia's case which is a commodity exporter.

The opposite is true. An expensive AUD generally has adverse affects on the economy. A lower AUD is seen to be advantageous to competitiveness. If Australia had Cyprus Pound values, then the economy would be in meltdown because it wouldn't be able to sell all its commodities.


Currency values are a measure of a country's performance relative to another country.

The FTSE is traded in GBP's. It is not traded in ASX's, DAX's or Nasdaq's. :lol:

So I hear its cheaper for an Aussie to invest in the UK economy. How about for a Brit?


Oh really! Then Cyprus should have had the strongest economy in the world when it had the pound.
Most more wealthy than any in the OECD.

But that's not the case is it? Didn't even come close! Let's not get carried away now.

What is a measure is the unemployment rate, consumer confidence, property prices and development. Currency is just a commodity like any other.

Some countries even deliberately devalue it or try to inhibit its value.
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Re: The Pound takes a hammering ..... again!

Postby Paphitis » Wed Oct 05, 2016 5:41 pm

Maximus wrote:
Paphitis wrote:
Maximus wrote:You twist and turn like a tagliatelle salad. As if you forgot what you said only a couple of posts ago. Some of what you are saying is just not accurate either.

I'm out of this conversation Paphitis,


I'm not twisting and turning. You are just too fixated with wishing Britain will just slide into the abyss. Why I have no idea. It's a bit childish to hold these grudges. Many countries have moved on from far worse things and Britain is not responsible for our situation. We need to take a lot of the responsibility too, not just blame others.

If you want to gain satisfaction from other people's despair then you need to look at unemployment rates, property prices, and consumer expenditure in order to satisfy yourself of the health or ills of the British economy. And those figures don't really portray a weak economy. Quite the opposite as a matter of fact.

The value of the Sterling is largely irrelevant let alone it's artificial value during BREXIT, which is unprecedented set of circumstances.


Where did you get all that from.

I do not wish the UK to slide in to the abyss and this has absolutely nothing to do with my opinion or the facts about the Cyprus problem.

In case you are not aware, because I have said this to you before. I am British. I am simply stating a fact that the GBP has weakened against all major currencies since 2008. Its a fact Paphitis.

All those economic indicators you mention get priced in relatively quickly after they are announced. Whatever the exchange rate is this is what the market thinks it is worth. whatever it is intrinsically worth is another matter but the GBP is not trading at its intrinsic value, which is also subject to change. It is trading at what the market percieves it to be worth. Dont argue with the market.

I still want to know where you would put your stop on that GBPUSD buy.....


It's not a fact. The Sterling was relatively stable against the Euro with the exception of now and that is due to the BREXIT.

It would have been impossible for instance for the Sterling to maintain the same ratio as the Australian Dollar during the resource boom and that was even with the Reserve Banks's unsuccessful attempts to devalue it as much as possible. That's what happens when resource prices are at record highs.
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