Pound Sterling undervalued Vs Dollar

JackOfGold

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Does anyone out there have any idea why the Pound Sterling is range bound at low levels against the dollar.For a while now the Pound:US rate has been US$1.74.To me the pound is undervalued as I think it should be worth around US$1.70 especially given the recent Euro/dollar moves to US$1.22.

By next week Friday 14th April I expect the following:

£:US$ should not be less than US$1.70
Euro/dollar should not be less than US$1.25
US$/Rand should not be more than ZAR5.99

Meanwhile by the end of this month gold should be around US$605.

Current rates are £:US$ 1.749 ; Euro/dollar 1.217 ; US$/rand 6.07 and gold is at US$593.85. :!:
 
pound undervalued

Hi, the pound undervalued issue.

Is about the money flow into the UK, money has come to the UK mainly through M & A this last business year, this suggests that the UK, has weak export potential at the moment and so this then impacts on the exchange rate. The second related reason; is that inflation is rising. This coupled with low exchange rates, mean that inflation will increase thus be passed onto the consumer through a general inflation, which will mean most likely that interest rate will rise in the medium term to carm the market and apreciate the pound. Also note that for the first time since 2001 last week the dollor interest rate became higher than the UKs which can also signal a change.

The best thing you can do at this point is get an inflation hedge such as Gold, its nearly @ 600 and it will definitly carm, but not yet and silver is going up fast since the week before last so...

regards

Pietro
 
Pound undervalued should be 1:US$1.70

aleksejgren said:
Surely if you say that pound is undervalued at 1.7400 then it is definatelly more undervalued at 1.7000

Thanks Aleksejgren for the correction.
You are right I meant to say that the pound is undervalued at the current 1.74 and that by Friday 14th I expect it to have strengthened to 1.70.

Cheers mate.
 
JackOfGold said:
Thanks Aleksejgren for the correction.
You are right I meant to say that the pound is undervalued at the current 1.74 and that by Friday 14th I expect it to have strengthened to 1.70.

Cheers mate.

I think that what Aleksejgren is saying is that the pound will weaken not strengthen if it goes from 1.74 to 1.70 as the pound is quoted as dollars per pound.
 
I agree with a_gnome, the pound is weakening if the numbers are going down as the dollar strengthens. Imagine if the pound was at 2.000 to the dollar that's pretty good for us who get pounds as we get more for our money. Therefore if the pound falls to 1.000 to the dollar then it is weakening...

So you mean to say you think the pound is overvalued at the moment yes ?
 
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