Elliott fans
Hi guys, well I don't have the same kind of resources as DC so I had to bail out on my short, now back where I got in but I ain't convinced at the mo so staying out. Here's the view from the Elliott boffs. Tried to get into this wave theory but just can't really see it. It seems that if you try hard enough you can see whatever you want and then make it fit a wave... Anyway, well done to all those who rode the pound up and then down.
All the best
Global Wrap: Pound For Pound
4/18/2007 9:08:28 AM
By Nico Isaac
When UK soccer sensation David Beckham kick-starts his five-year contract with the Los Angeles Galaxy team this July, he will become the highest paid sports figure in history, earning approximately $90 US for every SECOND he's on the field.
Well, turns out Golden Boots isn't the only British import looking more valuable on American soil than his native homeland: On April 17, UK's star currency player -- the British Pound -- crossed the $2 mark for the first time in 15 years.
In laymen's terms: ONE pint of beer in a local pub in England NOW costs the equivalent of an entire SIX-PACK of Budweiser.
Hard to swallow, we know.
As for why -- well, according to the mainstream "experts," recent strength in the British Pound is the direct result of "stronger than expected inflation figures in the UK." (Bloomberg)
More on this from the following April 17 BBC: The Sterling soars to a Fourteen-Year high against the US Dollar after "the Office for National Statistics revealed that consumer price inflation accelerated to 3.1% in March versus 2.8% in February. The rising CPI rate adds pressure for a further rise in official rates… A rise at the May Meeting is now a certainty."
Let's make sure we have this straight: the British Pound rallies on expectations that the Bank Of England will hike interest rates a fourth time this year?
That would be brilliant ---- IF, IF, IF the relationship between sterling and Bank of England's rate policy were as steady as Beck's penalty shot.
Historical data proves otherwise, as these stats make plain:
From 1984 to 1985, the Bank of England (BOE) adjusted rates upward from 8.8% to 13%, all the while Sterling suffered a sharp selloff to an all-time record low of $1.05 per US Dollar.
From 1989 to September 1992, the BOE slashed rates from 14.8% to 8.8% EVEN AS Sterling soared past the $2 mark to initiate the now infamous "Black Wednesday" of September 16, 1992: on this day, the Pound was ejected from the European Exchange Rate Mechanism after speculation drove prices out of its allowable daily range.
From 1998 to July 2003, the BOE cut rates from 7.5% to 3.5%, a period marked by a powerful, multi-year rally in the British Pound from 2002 until hitting a 12-year high against the US Dollar in 2005.
From November 2003 to January 2007, the BOE lifted rates from 3.75% to 5.25%. During this time, Sterling endured a severe downturn from 2005 to 2006 that saw its value hit a two-year low before reclaiming the upside.
Fact: there is no consistent correlation between major trend changes in the British Pound AND monetary tightening/loosening by the Bank of England.
Not to mention the other all-too-obvious point, namely: Saying that Sterling's jump past the $2 mark is the result of the April 17 UK inflation data is like saying that Beckham's entry into Major League Soccer Team puts him on the map of fame.
When the truth is, number 23 made that map in the first place.
Bottom line is this: When it comes to scoring points for spotting long-term trend changes in the major markets BEFORE they occur, the mainstream financial media tends to hit far more fouls than goals.
On the other hand, the March 30 Global Market Perspective's chapter on International Currency Relationships revealed that "sterling's push above the psychological 2.00 level" was only a matter of time.
Now, the question on everyone's mind is: how high will sterling fly? Elliott Wave International's Global Market Perspective offers an objective view you won't find anywhere else.
