Quote:
Originally Posted by Chris
Yes indeedy - current mid-market rates are 80.5 pence to the Euro, or €1.24 to the pound (tourist rates are not quite as good, reported as €1.20 in the news at 1pm). Still, the Euro has a way to fall before it hits the rate it was at a decade or so ago, when IIRC it was more like €1 = £0.68.
---------- Post added at 13:57 ---------- Previous post was at 13:56 ----------
Addendum ... the 10-year chart at xe.com is interesting:
http://www.xe.com/currencycharts/?fr...o=GBP&view=10Y
It looks as if the Euro's jump to the 80 pence-plus level coincided with the crash of 2008. Do we have any money market experts to explain why that would be? Was the Euro initially perceived as a safer port in the storm? |
I do not claim expertise because my forte is not currencies.
It would have been more easily understood had you set the cross on the chart to show Sterling against the Euro as most folk's primary interest is how many Euro's do they get to spend when away in Europe.
Whichever way you look at it, sterling fell off a cliff from 2008 onwards against most currency pairs and as I have stated in other threads it has been IMO due to the dilution of Sterling value against international crosses because in our case quantitative easing is comparable to a company issuing huge tranches of new stock. The net consequence is that value of old stock drops proportionately. With stocks the holders get a rights issue which makes up for dilution but with quantitative easing, we the public get a lot poorer if we want to spend in foreign currency.
In the wisdom of our leaders we followed the lead of the USA but without the protection of being holders of the global reserve currency and as a consequence we lost shed loads of value against the Dollar which as it is the currency of energy and commodities makes a huge fat lie of the con trick that global commodity prices are the cause of energy driven inflation. There is truth in the lie but the fact that to bail out the banks, our currency exchange fell 30% against the Dollar is conveniently forgotten because it added a massive percentage to anything purchased in Dollars.
The truth of the matter IMO is that damage has been done, as the charts plainly show, and in the relative valuations of exchange crosses we only get elevated from bad to half way reasonable when the other side of the cross is in serious trouble.
The Eurozone was not allowed to play silly devils with their currency as we did and the Euro strength represented our weakness and had nothing to do with how good they were but more how bad we were\are. When viewing the charts it truly makes one wonder what calamity needs to overwhelm Europe before we again look less bad than them.
As the currency cross is the global measure of the standing of our currency against others in the world use the chart with GBP first and in the lower box look at our rating against the Dollar, Yen and CHF (Swiss Franc). It is hardly any wonder that international money is attracted to London property when the coalition's actions signalled open for business at fire-sale prices, all currencies eagerly accepted.