Sterling Weakness
I don’t need to tell you that the pound is weaker than it has been for a very long time. What I would like to add is that it’s not all about UK party politics, where much of the main stream media are suggesting policy mistakes have “crashed” the value of the pound. Certainly Sterling fell against all currencies after the budget announcements, but it was a fall that came on top of a weakening of all currencies against an incredibly strong US dollar. Last month I blogged about the strength of the US dollar when it surrendered some of its recent gains which allowed all other assets to briefly rise in value. Only when the strength of the Dollar pauses, will we see a rise in value of our savings. We need to endure a little more pain before the pendulum swings.
| Sterling v Dollar | Euro v Dollar | Sterling v Euro | |
| 5 Day | -5.71% | -3.69% | -1.83% |
| 1 Month | -7.90% | -3.42% | -4.37% |
| 3 Month | -12.11% | -8.79% | -3.40% |
| YTD | -20.30% | -15.11% | -5.88% |
| 1 Year | -21.29% | -17.45% | -4.41% |
FED up
Last week the US Federal Reserve Bank actually delivered mixed news, but the investment markets were battered never the less. It raised the interest rate by (only) 0.75% as some of their short term data confirmed the US overheated economy was actually slowing down and cooling. Many commentators, including the FED, had previously suggested a full 1% was likely and already baked in. So good news.
Continue reading “A Right Pounding”