Recession fears weaken sterling

[Doctor Cynic]

Source: BBC

The pound has hit its weakest levels against the dollar in more than two years, extending recent losses on fears about the health of the UK economy.

Sterling dropped as low as $1.8405 - its weakest since July 2006 - before recovering to $1.8542 by mid-afternoon in Europe.

Sterling has fallen sharply this month. As recently as mid-July, one pound bought two dollars.

The pound's losses gathered pace on Friday due to fresh recession fears.

Read more: http://news.bbc.co.uk/2/hi/business/7580430.stm

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Now it's their turn to see their currency fall...

[MercutioATC]

1. Oh, we're ALL going down.

Not as in "the sky is falling", but we do have a global economy. When one of us brings on a recession, everybody feels it.

[Moondog]

2. You're right.

But an eight percent drop in about six weeks is a pretty big hit in a short period of time. Particularly for an oil producing and exporting country.

[MercutioATC]

3. Look at what the Asian markets did two weeks ago.

IMO, what we're seeing now is the turbulence you get when the toilet water circles the drain after one flushes. Up and down, but always down overall.

There's a bottom coming, and things will turn around. It's just going to take a year or so.

[Moondog]

4. Agreed

and the question is how far down is down.

[MercutioATC]

5. If you get some biblical sign, let me know.

It really depends if they let it actually hit a bottom which would allow for a true correction or if they engineer a soft bottom.

If it tanks the way it should, I'm starting to buy back in when the DOW goes below 10k, increasing to what I see as it's real bottom of 8.5k or so.

If we get an engineered soft bottom, it'll hover around 10k for a while...but it'll be shaky.

We'll see what happens. Either way, I only have 7 1/2 years to retirement, so I'm not getting crazy.

[Moondog]

7. IMO The Bank of England

is unlikely to allow a purely market driven bottom to happen. They are even more attuned politically to their domestic issues than is the FED.

This is not one I'd try and time. But then, I've been retired for several years, although ridiculously early. I'm more interested in not losing money than I am in making more. Based on your 7 1/2, and assuming "normal" retirement, I'd guess we're about the same age, give or take a few months.

Having said all that, consider this. There are some who believe, and I am one of them, that the US markets (currency, debt and equity) are not as detached from the various overseas markets as is currently, and popularly, believed.

Good luck with your impending retirement. It is not only as good as is advertised, it is actually better . . .

[MercutioATC]

8. I'm 40. I, too, am retiring "ridiculously early"....

..just not quite yet.

...and it's good to get another positive report on the joys of being retired :)

[RUMMYisFROSTED]

6. Follow a Chimp: get Chimpy things.