primary currency for uk traders?

[Scotty2Cues]

When I go live Im not sure whether to deposit in £ or $

What do you do and what are the (if any) pros or cons of each?

Thanks

 

[Adamus]

I find it slightly less confusing to have my base currency as $ when figuring out my forex trading accounts, since most of the pairs I trade involve the dollar.

 

[Rhody Trader]

If you opt to have your trading account in something other than your home currency you are basically taking a long-term bet on the exchange rate in question. That is generally not a great idea for someone just getting started.

 

[meanreversion]

I have converted a decent amount of capital from £ to $ for the purposes of meeting margin for trading futures (on CME). I don't think the variation in £/$ will materially impact the results from my trading system, to be honest. Either £/$ goes down, which is good I guess, or it goes up and then trips to the States look juicy again.

 

[Rhody Trader]

The swing in the £/$ exchange rate from high to low over the last few years has been about 40%. That's not inconsequential if you are forced to cash in at wrong time. Obviously, if you have dollar expenses, though, then that's a seperate consideration.

 

[Scotty2Cues]

If you opt to have your trading account in something other than your home currency you are basically taking a long-term bet on the exchange rate in question. That is generally not a great idea for someone just getting started.

Ok thanks - will deposit in home currency

 

[Adamus]

Ideal solution, once you have enough capital, is to have two accounts, one in £, one in $. Hedging with zero cost.

 

[PipMuncher]

Obiously if you go with the dollar your basically short GBP/USD for a lot equivalent to your trading capital.

I'm no funamental anylist - but with UK interest rates set to make a move up by the end of the year and the obama sounding pretty doveish - I'm not sure thats a trade I'd take...

 

[PipMuncher]

Having said that - the UK is making cuts, and the US is still on the fiscal stimulus train... So - I may well be proved wrong!

Like I said - I'm no anylist!!!

 

[arabianights]

I'm no funamental anylist - but with UK interest rates set to make a move up by the end of the year

You must know something the interest rate markets don't then, because they're pricing in almost no chance of this.

You can easily do a very low risk trade on your view if you're interested - go short Dec Short Sterling futures.

 

[PipMuncher]

You must know something the interest rate markets don't then, because they're pricing in almost no chance of this.

You can easily do a very low risk trade on your view if you're interested - go short Dec Short Sterling futures.

Economists seem to have a general cosenus that UK interest rates will have to make a move up toward the end of 2010 to curb inflatoin.

At a guess, id say recent price action is proably due to the fact that many had previously expected interest rates to move up in the UK sooner due to high infation in the first half of 2010 - but due to lower than expeced inflation forcasts this didnt happen.

 

[arabianights]

Economists seem to have a general cosenus that UK interest rates will have to make a move up toward the end of 2010 to curb inflatoin.

I promise you, they don't.

This isn't a prediction about where rates are going, but just letting you know what the current consensus is - at present the majority of economists aren't even forecasting a rate hike in Q1 11.

 

[arabianights]

In fact, since I'm such a kind guy, here's the latest poll I have, taken just before Thursday's meeting...

 

[cristiano]

In fact, since I'm such a kind guy, here's the latest poll I have, taken just before Thursday's meeting...

That is kind.

I read your message quickly and read it as - 'here's the latest poll I have taken'