Buy sterling now?

[demoivre]

I'm also interested in this. I need to have a sterling bank draft in place by the end of the month and wondering whether I should lock in the rate now.

Am I correct in thinking that speculators have driven the Euro value down because they are expecting a large rate cut from the ECB this week (anyone know what day the ECB are making an announcement?)? If so are you better off waiting until the new rate is announced and the price should then reflect the true value and not the speculated value? Or is that way too simple a view!?

S

Yes. Your logic would suggest that sterling should have fallen through the floor last Thursday when the BOE lowered the Bank rate by 50 bp to 1.5% thus increasing further the yield differential between sterling and the euro. The opposite has happened !

 

[Saudi]

I think a larger cut was expected by the BOE and because the ECB rate announcement was due this week the speculators have pushed the Euro down in expectation of a larger cut than 50bp.