IKN

children of an idle brain

The British Pound (GBP) and the Euro (EUR)

Once again we wander off IKN’s normal beaten track to check out the other side of the pond. It just seems to me the real baselines for metals prices are being shifted around in Europe right now so it’s silly not to watch.

Interesting how the British Pound (GBP) has managed to rally pretty well recently against the euro (EUR). You would have thought the GBP attached to the hip to its bigger neighbour currency….but then again, perhaps it makes perfect sense with the Brits not bodily attached to the PIIGS.

Fund managers know what it’s like to use Emerging Market leverage. It’s fun in the good times, but has a nasty bite when things go bearish. Now we have the same thing here, just on a much bigger scale. Germany/France etc are fully industrialized nations and have been benefitting from the sharp growth in the southern European EMs for the first decade of the Euro’s existence. But now the EMs are weak and those 1st worlders are getting pulled down with them. Except for The UK, shown by the GBP that’s moving away from the mess. Just thinking out loud this Thursday morning and noting that a complex subject can have some fairly straightforward results.

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