Monday 25 February 2013

Wherefore the Pound now?


Now here is an excellent article. The world of forex trading is relatively alien to me. Everyone I know who does it professionally seems to work on the basis that you need a few millions to punt with and then try and take a tenth of a percent a day here and there and somehow make your self rich. It always sounded remarkably hard to me - although I am yet to meet a poor FX broker which suggests there know something I don't.

Also FX Trading lends itself well to technical analysis of charts - which is all very well and good but not one of my stronger points; my strategies in trading tend to be more focused around event driven moments.

However, as the link shows, perhaps now is one of those moments. With the AAA downgrade likely to have an impact on economic prospects, the most obvious suggestion is to say that the pound will fall further.

However, a glance at the various charts proves this to be unlikely, the fall has already bee fairly precipitous and the idea that somehow the Euro is a long-term stronger option that the Pound must be ludicrous given the contradictory strains present within the European Union.

The entire markets too are long on the Norwegian Kroner and Aussie Dollar (tipped here years ago as the place to be, of course), which will be positions unwound one day along with the Swiss Franc.

So there we go, everything in place for a contrarian bet and the pound to make a steady recovery...anyone buying this?

11 comments:

Blue Eyes said...

Everyone seems to be forgetting that the pound was at parity with the euro not long ago! The serious money to be made from FX trading is for those who run agencies. Sending money from a UK bank account to a French one is ridiculously expensive!

Budgie said...

CU said: "the idea that somehow the Euro is a long-term stronger option that the Pound must be ludicrous"

The euro elite believe in the euro, whilst lining their own pockets. The British elite do not believe in the pound, or even the UK, whilst lining their pockets. The euro will survive, the pound won't.

DtP said...

@Budgie - sort of agree - there's a helluva lot of backing behind it but that bloody little thing called democracy may still turn out, 1 day, perhaps, to be an effective mechanism to thwart the baseless political homespun ego wank that it has become. Nah, i'm not sure I believe it either.

Fortunately, SKYNET's gonna kill us in 20 years time so we can all rest easy as per sovereign currency!

I seem to remember being taught that it was either Rousseau or Mill or some other clever bugger that said 'you cannot imagine the power that wells up through the nation state' well, 250 years later - what a chump, what a myopic visionary - democracy, pah, it's an irrelevance.

Blue Eyes said...

Let's see how the Euro is doing after the votes in Italy are counted...

measured said...

Why go for forex? FTSE 100 companies are an excellent currency play, hence the recent FTSE ride.

assurance km said...

Euro is a long-term stronger option that the Pound must be ludicrous given the contradictory strains present within the European Union.
IT is a good thing.

James Higham said...

Don't want it right down - maybe just a bit more would do the trick. Watching it morning and afternoon.

Ryan said...

Churchill came to power because the power elite were forced to stand aside and allow him to take the reigns during the war years because they knew damn well none of them could hack it. Thatcher got elected because the power elite finally had to give in and allow the people to have the kind of leader they wanted, because the country was descending into chaos. I'm guessing that we are getting close to the point where the EU power elite will be forced to make the same decision, or risk having everything they live for washed away in a day.

Dan said...

@Budgie: normally it takes a good long time for a country to so mismanage its currency that it hits a crisis. The Roman Empire took centuries, despite rampant corruption and adulteration of coinage. Zimbabwe took a mere forty years to get to hyperinflation, though admittedly they had a more lunatic boss than any Roman emperor.

And then we have the Euro. Less than fifteen years old and it is already up a certain smelly creek without a paddle, and it was apparently designed and run by the best financial minds of a continent. This doesn't bode well at all; it looks rather as if Germany and one or two others will get the boot, then pretty soon after those Zimbabwean 100 trillion dollar notes I bought for a laugh will look tame in comparison.

No, the Euro isn't a long-term bet, not for me, anyway.

Budgie said...

Dan, a couple of years ago many eurosceptics started predicting "imminent" failure of the euro. I disagreed (though I would dearly like it to fail).

Now the euro is in better shape than it has been for a couple of years. The euro elites want the euro to survive, but UK politicians don't care about the pound or even the UK. Cameron is one of the worst.

Agence communication said...

interesting ideas "" Also FX Trading lends itself well to technical analysis of charts - which is all very well and good but not one of my stronger points; my strategies in trading tend to be more focused around event driven moments.

However, as the link shows, perhaps now is one of those moments. With the AAA downgrade likely to have an impact on economic prospects, the most obvious suggestion is to say that the pound will fall further.""