Views on GBP / USD trend?

[DimPrawn]

What's the collective view on the £ vs the $?

GBP/USD Share Price Chart | GBPUSD=X | GB0031973075 | Yahoo! Finance UK

Heading back down to test new lows below 1.40 or turning up back to around 1.60 given a few months of drastic deficit cutting?

[TimberWolf]

What's the collective view on the £ vs the $?

GBP/USD Share Price Chart | GBPUSD=X | GB0031973075 | Yahoo! Finance UK

Heading back down to test new lows below 1.40 or turning up back to around 1.60 given a few months of drastic deficit cutting?

I've been wondering the same thing. The government on this side of the Atlantic seem to be making the right noises about tackling the deficit, what about the other side?

[scooterscot]

I've been wondering the same thing. The government on this side of the Atlantic seem to be making the right noises about tackling the deficit, what about the other side?

The other side is backed by China...

Britain is backed by fresh air... how's that grab you?

[TimberWolf]

The other side is backed by China...

Britain is backed by fresh air... how's that grab you?

The US has been trying to get the Chinese to revalue its currency so that it can devalue the dollar properly.

[alreadypacked]

The US has been trying to get the Chinese to revalue its currency so that it can devalue the dollar properly.

China saw what happened to Japan when it revalued its currency at the request of the Americans, I don't think they will do it.

[fullyautomatix]

It will take an absolute US economic disaster for GBP to make any gains on USD. 160 Billion deficit and our government is talking about a 6 billion cut. Its a bit like pissing in the sea and seeing if it has any affect. Short term GBP will crash against USD.

[TimberWolf]

China saw what happened to Japan when it revalued its currency at the request of the Americans, I don't think they will do it.

Latest news, as if to order:

China is seeking to allow the yuan to strengthen to deflect criticism from its trading partners and curb inflation, while protecting a recovery in its exports....“The central bank is trying to let the market know that its preference in this round of exchange-rate reform is a gradual appreciation of the yuan,” said Li Wei, an economist at Standard Chartered Plc in Shanghai. ...The yuan surged 0.42 percent yesterday, the biggest increase since July 2005, and climbed a further 0.1 percent initially.

Yuan Falls Most Since December 2008 - Bloomberg

A bit of good news though, for those not holding yuan (or are holders of dollars, pounds, euros,...)

“The yuan will appreciate only gradually. Europe is a huge trade partner of China, and if China wants a managed currency basket, they may not want the yuan to appreciate that much.”