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EUR/GBP alliance

Discussion in 'Market Predictions and Reports' started by ChrisEccles, Mar 23, 2009.

  1. ChrisEccles

    ChrisEccles Private, 1st Class

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    The Euro, if it were a mountaineer, could be said to have strong
    fingernails. While dear old Gordon Brown is enjoying the round of
    mutual backslapping which always accompanies a Brit PM's first
    forays into the backyard of a new White House incumbent, it behoves
    us to remember that the UK, despite the protestations of some of its
    more Nazi parliamentarians, is still closely tied to the commercial
    goings-on in Western Europe. While the Euro has been up and down
    in its other pairings like a bride's nightie, the EUR/GBP has in recent weeks
    displayed what passes for stability in this market.

    But the question becomes: How long can this last ?

    The ECB, traditionally ascribed with feet of clay, have "come out" with
    some hints that even they might like to join the money-printing game.
    Certainly, it would do their three principal member states no great harm
    to have an extra edge in trade outside the EU, stemming from a more
    competitive Euro.

    If the ECB do begin to go for it, when will it happen ?
    And, will it happen before big traders start to dump shedloads of the
    currency to take some profits ? EUR/GBP parity, as seen last Autumn,
    was knee-jerk to the dreadful revelations of genuine ineptitude in the
    Brit banking sector, not a reflection of a economically vibrant Europe.
    Yet, we are still up there in the mid .9000's without a care in the world.

    Why ?

    It may just be that EUR/GBP is poised for falling out of the sky like a
    DC3 with both engines on fire. If this happens, no major EUR pairing
    will be immune to the fall-out.

    What do others think ?

    -
    Chris
     

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