5 November 2008

Sterling saw stay current low against dollar

The survey of 56 analysts, taken Oct. 31-Nov. 4 before Barack Obama won the U.S. presidential election, showed they expect sterling to $ 1.59 in one month, $ 1.60 in three months, slightly down from $ 1.58 in six months , And returned $ 1.60 in 12 months.
This is considerably lower than last month, forecasts, which saw the cable to $ 1.70 within twelve months.
Last month saw a sharp decline of about 10 per cent in the cable to a six-year low of less than $ 1.53, well below the forecast of $ 1.75 from last month's poll, and is far from the levels of the Company over $ 2.10 just a year ago.
Twenty-five of 56 forecasters see sterling below $ 1.60 within one year compared with only seven of 55 in the prediction poll last month, most of them downgrading their views in all the horizons of time surveyed.
The forecast for the month of survey ranged from $ 1.38 to $ 1.89 in a year, down from last month forecast that were collected before major central banks cut interest rates in a coordinated movement to strengthen the global economic slowdown.
"We expect cable to suffer even more after the UK economy has entered a recession and the BOE will be forced to cut rates aggressively in the months to come," stated Roberto Mialich at UniCredit MIB, which see the pound to $ 1.57 a month.
UniCredit is the first place to one month's change forecasts so far this year.
The economy of Britain was battered by a global economic slowdown that began a year ago with the mortgage problems in the United States and many economists say the country is now in the throes of recession that will last for one year or more.
The British economy fell 0.5 percent in the third quarter, after standing in the second, and a slew of recent data suggest it has fallen again in the fourth. A recession is usually defined as two consecutive periods of negative growth.
The British finance minister Alistair Darling said last week the country is heading into recession while the European Commission said this week that the economy would shrink by one percent in 2009.
In an attempt to revive the struggling economy of the Bank of England is considered by the lower rates by 50 basis points on Thursday, and possibly by as much as 100 points.
"It is generally accepted that more aggressive rate cut by the BOE could seriously diminish the attractiveness of the pound sterling in UK / US yield differentials narrow," said Kenneth Broux at Lloyds TSB.
The Federal Reserve has cut rates over the past year to revitalize the largest economy, but the BOE has been chosen as it has grappled with inflation running at more than double its target of two percent.
The book received little better against the euro - the pound sterling fell to a level of 81.95 pence after negative fourth quarter GDP figures were released in October - despite the 15-nation bloc itself even on the brink of recession.
Cross rates calculated by Reuters shows one euro worth 80.0 pence in six months and 79.2 pence in a year. In the last month's poll, the euro was estimated at 78.8 pence in the six months and 78.1 pence in a year.
The volatility of the pound sterling to one month's annualized basis against the dollar decline has been observed in the coming weeks to 13 percent this month from 25.3 percent in October.

by erectusplus at 15:07:00 |

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