Bad news for some on this board...but it cheered me up!

_______________________________________________________________________

Euro 'set to lose parity with dollar'

19-05-2005



The report, entitled 'Seven Reasons to Sell the Euro', warns that slumping growth and political crisis have started to take their toll on the eurozone.

"We are now witnessing the beginning of a bearish trend. Parity with the dollar could be broken within the next 18 months," said the note, written by eurozone economist Joachim Fels.

Mr Fels said the euro was "overvalued" on the basis of purchasing power, while trend growth prospects for the region were half US levels. Global risk aversion as the credit cycle turns will tend to favour the dollar as a "safe haven".

Mr Fels decried a rise in "anti-capitalist sentiment" in France and Germany, and warned that markets were still too complacent about likely turmoil if the EU constitution is rejected.

"Markets will have to come to grips with the insight that the single currency will not eventually be backed by a single government. This is why the euro will have to trade at a discount to the dollar and why it is unlikely ever to replace the greenback as the world's reserve currency," he said.

Oh lawdy!

Don't you start !





;-)

Currencies are constantly fluctuating against each other. It is still too early to determine the long-term trend of the euro against the dollar.
I really don't see why everyone gets so excited every time news comes out that one or the other is falling.

I don't even bother to check if what is being posted is true.

I couldn't care less, so long as I can keep my sterling.

This board is for discussion on weights and measures.

Well said Steve.

Some people seem unable to seperate certain issues.

Found this interesting tidbit! Seems the drop in value for the euro is a good thing and is producing positive effects.

I find the German situation somewhat amusing. On one hand Schroeder is blamed for the economy being weak, but when he tries to bring about reform, meaning introducing US and UK style jobs, he makes the people even more bitter. It is like damned if you do and damned if you don't.

The American way works for the economy in general, even if the people have to work longer hours at multiple jobs and give up benefits. Until we can force the Chinese to float the Yuan, and then see a return of some of the lost jobs to the US, we have to live with our liberalized job market. If Schroeder is ousted and a new leader comes to power what can or would he do that would be effective? I bet if they got a new leader who doesn't care what the people think and brings about US style reforms anyway, the economy will improve dramatically within a year.


Euro


In another series of good Eurozone data, we saw the unemployment rate for the region dip lower from 8.9 percent to 8.8 percent and PMI manufacturing indexes across the region (for France, Germany and Italy) all improve during the month for the month of June. The recent trend of data confirms the amount of impact that currency movements can have on a country’s economy. Even though the European Central Bank has been standing pat on rates, the slide in the euro has helped to spur modest growth even in the face of rising energy costs. Politics however continues to dominate the headlines with German Chancellor Schroeder facing a no-confidence vote that could eventually topple his government. With 2 more years left in his second term, Schroeder may be forced out of office sooner as Germany paves the way for early elections. Seventy percent of Germans polled are bitter and want another election in September. The votes reflect their dissatisfaction with the performance of the economy and Schroeder’s unpopular reforms.



British Pound


Plunging close to 600 pips over the past week, the British pound came under heavy selling pressure following a barrage of weaker economic data. Even today's stronger PMI survey could not help the currency pair overcome the bearish momentum. The price action in the GBPUSD illustrates the importance of interest rates and carry on currencies. The pound rallied significantly between 2003 and for most of 2004, which was a time when the UK was raising rates aggressively while the US was dragging their feet. This time around, we have the same divergence but a role reversal. The UK is seeing a more compelling reason to cut rates while the US on the other hand is rolling ahead with its rate hikes. This has caused the gap between UK interest rates and US interest rates to move closer, providing a perfect reason for the pound's recent price action. Meanwhile, the big event today was actually the passing of the baton of the EU Presidency from the Dutch to the British. The reception abroad is far from supportive with a number of European papers mulling on whether the UK is really the best choice as a leader to pull the region out of its current crisis. Especially since they have been one of the most skeptical on the fate of the EU and it was in part their refusal to give up their rebates that resulted in the collapse of the EU budget talks. On July 12, Gordon Brown will be unveiling the UK's plans for the region's economic policies to EU Finance Ministers. It will be interesting to see not only their suggested proposals, but also how the other members of the EU respond to them.

Steve said

"This board is for discussion on weights and measures."

I couldn't agree more. But we can still have rugby related diversions on occasion......

Would everyone agree that Sir Clive's loyalty to players that were out of form or coming back from injury contributed to the Lions record defeat on Saturday and to the previous weeks defeat?

Or was it because the pitch was marked in metric.....

:-)

Maybe the best way to handle diversions is to create an off topic section. Some forums do that and all non-metric related topics could be discussed there.

<<Or was it because the pitch was marked in metric.....>>

Hang on a mo - I'm just going to count all the Scottish players - please bear with me for a moment folks.....


;-)

Steve

Lol, but

There were players with Scottish grandparents on the park....

Unfortunately they were playing in the darker coloured kit

:-( :-( :-(

Let's hope they don't do the hakka with skirts on then!

BTW - Whats it feel like having the great unwashed smashing car windows in whilst not having a clue what "poverty" and "G8" mean, doing there stuff just down the road from you?

Personally I'd say "Hey! Policeforce! I'm going to look away so whatever you do to them in the next 4 minutes I will not know anything about!"

And that's from a Libertarian!

What a difference just a few weeks make.

Three major news events in the past few weeks have ended once and for all any possibility of the euro collapsing and countries leaving the single currency.

1.) The bombings in Britain. As horrible as they were, they exposed the vulnerabilities of the British to attacks and made London seem less safe as a financial capital.

http://www.businessworld.ie/livenews.htm?a=1219548;s=rollingnews.htm

2.) China and Malaysia have officially unpegged their currencies to the dollar. China revalued its currency, the yuan from 8.22 to the dollar to 8.11, which at current exchange rates is very close to 10 Yuan = 1 €. China has made it clear that it will begin to align its currency with a "basket" of currencies. So far the basket is known to include only the US dollar, the euro and the yen.

http://today.reuters.com/business/newsarticle.aspx?type=reutersEdge&storyID=2005-07-22T151808Z_01_L22549677_RTRIDST_0_PICKS-MARKETS-EURO-YUAN-DC.XML

The unpegging will take pressure of the euro and keep it from rising to much and causing the destabilizing effects seen a few months ago. The Chinese support for the euro will assure the euro's place in the world economic community.

3.) The new Iran-Iraq Alliance. The US interference took a kick in the teeth on Tuesday last when the new Iraqi leader went to Tehran and pledged a new era of cooperation between the two former enemies, ending decades of hostility between the two nations.

The two governments went into a tizzy of wheeling and dealing of a sort not seen since Texas oil millionaires found out about Saudi Arabia. Oil pipelines, port access, pilgrimage, trade, security, military assistance, were all on the table in Tehran. All the sorts of contracts and deals that U.S. Vice President Dick Cheney had imagined for Halliburton, and that the Pentagon neoconservatives had hoped for Israel, were heading instead due east.

Iran, last year announced its intent to cease selling oil via New York's NYMEX and London's IPE and sell oil through its own exchange. Iran has the support of China, the EU and Russia. Iran has also pledged to sell its oil in euros. The bourse will begin operating in March 2006.

The three events of the past two weeks are stepping stones in ending centuries of US and British domination of the world's economies. The increasing strengthening of regional alliances and coalitions will assure a more balance of world power.

The increasing dependence on trade that will follow the realignment will assure a greater demand for the elimination of measurement units not part of SI.

Fear this trend Tony, because you will be on the losing side.

re (Euroheretostay): "Fear this trend Tony, because you will be on the losing side".


REPLY: A charming message if I may be so bold as to say so. Yesterday it was reported that the Germans are about to elect another Premier because they are fed up with around 5 million people being unemployed. The euro isn't helping them to 'win' just now, is it?

Your comments about the effect of the London bombings on London's financial markets, currency etc. were only a touch short of gloating. The thousands of potential Muslim killers in our midst have promised all-out attacks on all the capital cities of those countries whose armed forces are in either Iraq or Afghanistan. It may be somewhere else next month that they will murder dozens of innocent people

"REPLY: A charming message if I may be so bold as to say so. Yesterday it was reported that the Germans are about to elect another Premier because they are fed up with around 5 million people being unemployed. The euro isn't helping them to 'win' just now, is it?"


The euro is not Germany's problem. You can't seem to let go of that. The real problem is the rigid structure of the German economy that the German government has been to afraid to reform. But there is improvement, slow but sure, as some reforms are being implemented.

A new government by CDU chancellor Angela Merkel may not be so afraid to implement the reforms needed even if in the short term she invites the anger of Germans not wanting to give up the social freebies they feel entitled too. The reforms the Germans are looking at are along the Swedish model and will come just at the right time.

http://www.bloomberg.com/apps/news?pid=10000100&sid=aRt43aGkNYWg&refer=germany

Here is an interesting article that shows Germans blaming the high cost of rebuilding Eastern Germany and the loss of jobs to globalization as a root of their problems. Yet, despite the problems, the German economy still profits on exports and is the richest in the EU. Even richer then the UK.

http://www.dw-world.de/dw/article/0,1564,1645502,00.html

Instead of worrying about the German economy you should be concerned with developing trends in the British economy. Things are going sour fast.

http://www.menafn.com/qn_news_story.asp?StoryId=CqUbVqeidyNjPDgfPBI1Ly29UB215


http://www.todayonline.com/articles/62950.asp

The British economy showed its weakest year-on-year performance for 12 years during the second quarter, official data showed, piling pressure on finance chief Gordon Brown's 2005 growth targets.
.
The manufacturing sector meanwhile fell into a RECESSION, National Statistics added. Analysts said the negative data pointed towards an interest rate cut next month.

There are so many articles showing the downward trend in the UK economy that it is impossible to show them all. But here is a list of links from doing a Google search on "British Economy" and selecting NEWS.

http://news.google.com/news?hl=en&lr=&rls=RNWE%2CRNWE%3A2004-23%2CRNWE%3Aen&tab=wn&ie=UTF-8&q=%22British+Economy%22&btnG=Search+News


In the next few months we will see a big positive change in Germany and the eurozone but Tony will still find some reason to blame the euro. Maybe then it will be for pushing the UK into recession.

re (Daniel Jackson): "In the next few months we will see a big positive change in Germany and the eurozone..."

REPLY: That's exactly what was said when the euro was launched as a shadow currency on 1 January 1999! - and Britons were told that we were 'missing the boat'. Good job we did. It's sinking!

The only boat that is now sinking is the UK. The UK is now in OUTRIGHT RECESSION. If that isn't sinking, I don't know what is. The euro will float for along time to come as it is supported by the international community.





BOOM .......... BOOM .............. Crash

UK Economic Growth is Slowest for 12 Years
2005-07-22
Evening Standard; London (UK)

BRITAIN'S economy is CRAWLING at its weakest pace for more than 12 years with manufacturing INDUSTRY COLLAPSING into OUTRIGHT RECESSION.

Official figures showed the British economy grew only 0.4% in April, May and June, marking a year-on-year expansion of 1.7% - the weakest since the first quarter of 1993.

Relatively high interest rates and the record oil price are among factors that have stopped consumers spending money and forced up the cost overheads for UK Plc, conspiring to crimp the economy.

Heavy industry's output fell by 0.4% during the three months while the pace of expansion of the bigger service side of the economy also slowed. The weak figures came a day after strong news from the High Street, Government statistics showing retail sales made a surprise bounceback last month.

Economists said the latest data inevitably pointed to interest rate cuts soon. "This should guarantee a 25- basis-point [0.25%] interest rate cut in August, notwithstanding the surprising jump in retail sales," said Global Insight's Howard Archer.

He predicted the economy as a whole would now expand by only 1.8% this year, highlighting the problems Chancellor Gordon Brown faces in balancing the books.

Brown ran into controversy this week when he changed the length of the economic cycle in a move that would allow him to meet his golden rule on spending. The rule states the Government will not spend more than it receives in taxes, apart from its investment in schools, hospitals and other long-term issues.

The weak economic growth rate makes it far harder for the Chancellor to achieve this promise because of the reduction in tax revenues it brings.

Opposition parties and most economists think he will have to increase National Insurance contributions to balance the budget but the weaker the economy gets, the harder it is for him to push through such policies without committing political suicide. No matter how much he moves the goalposts in the current economic cycle, he still faces the prospect of starting the next with multibillion-pound deficits.

re (Daniel Jackson): "The UK is now in OUTRIGHT RECESSION..."

REPLY: Dear Mr Jackson, Shouting - and untrue as well

That is right out of one of your local newspapers. I'm not shouting I made it capital letters for emphasis. I wanted to make sure you saw it with your own eyes, the word recession.

Now, tell me again how wonderful the UK economy is doing. you have your own currency and control over your own interest rates, so why isn't it making your economy prosperous? And why is the German economy richer then that of the UK?

Dear Mr Jackson,

Using capital letters on the Internet is defined as 'shouting' according to 'netiquette' (Internet etiquette) and is considered bad manners.

Before posting again, might I invite you to learn good Internet manners by putting in 'netiquette' into Google or another search engine, and having a careful read.

I'm surprised you continually rush to hold up Germany as model of success; this comes from a BBC report earlier this year (March) - edited only for length:

[NB Reminder: Germany became part of the eurozone on 1 Janaury 1999]

---------------------------------------------------------------------------------------------------------------------------------------------------------

German jobless rate at new record

Unemployment in Germany is at record levels

More than 5.2 million Germans were out of work in February, new figures show. The figure of 5.216 million people, or 12.6% of the working-age population, is the highest jobless rate in Europe's biggest economy since the 1930s.

The news comes as the head of Germany's panel of government economic advisers predicted growth would again stagnate. Speaking on German TV, Bert Ruerup said the panel's earlier forecast of 1.4% was too optimistic and warned growth would be just 1% in 2005.

"Do something!"

The growth warning triggered anger even from government supporters, who said the Social Democrat-Green administration of Chancellor Gerhard Schroeder had to do more. "We are not going to create more jobs with growth of 1%," Harald Schartau, head of the Social Democrats in the northern state of North Rhine-Westphalia, told ZDF television.

Many German newspapers had the figures a day ahead, splashing them with angry headlines on Tuesday morning. The mass-market Bild tabloid used red type to splash the phrase, "Do something!" across its front page...

"Using capital letters on the Internet is defined as 'shouting' according to 'netiquette' (Internet etiquette) and is considered bad manners.

Before posting again, might I invite you to learn good Internet manners by putting in 'netiquette' into Google or another search engine, and having a careful read."

That may be fine and dandy, but network54 doesn't have a means to allow the emphasis of text, such as highlighting (bold face) or changing the colors. Thus the netiquette rules have to be bent in order to overcome the shortcomings of the network54 service.





"I'm surprised you continually rush to hold up Germany as model of success; this comes from a BBC report earlier this year (March) - edited only for length:"


I'm surprised you continually rush to hold up UK as model of success. Every country has its problems. I'm just using Germany, because they are richer then the UK and to show that despite everything negative you say about them it can be countered with something positive Also,because you first brought Germany into the argument when you mentioned them first.

If all you can harp on them is about their unemployment that isn't really much. There are other aspects of their economy and living standard, such as fantastic export growth, you fail to recognize. Oh wait! That is something positive and we can't have Germany looking good when we want to show only negativisms from the eurozone.

Even if the German employment problem isn't tackled, the German economy will still be richer and more powerful then that of the UK.

Enjoy your recession while your German unemployed fellow citizens of the EU will be enjoying their generous unemployment benefits.

Erm - do you actually know what the term "recesion" means? Obviously not from your usage of it combined with your own words "slow growth".

Still - some fine use of the search facility "google" up there, Danny Boy, with the string "UK ecomomy really really bad German very rich". It sure did convince me.

What also convinced me is the sort of creep that would use the deaths of people in London from the worst terrorist atrocity in Britain's existance to somehow make a point about how woeful and poor the UK people/economy is.

You've just moved up to 45 SPM (shovels per minute).

Congrats.

AP
German Business Confidence Up for 2nd Month
Tuesday 2005-07-26 07:55 ET
German Business Confidence Up for Second Month Running in July, Survey Shows


BERLIN (AP) -- German business confidence rose in July for the second consecutive month, reaching its highest level in five months and indicating the country is on "a path of solid growth," Germany's economics minister said.


The German Ifo economic institute's closely watched index, released Tuesday, rose to 95.0 points from 93.3 points in June, as business expectations improved strongly ahead of early parliamentary elections.

"The latest, this time clear, rise in the Ifo index confirms the positive growth outlook for Germany," Economic Minister Wolfgang Clement said. "We are now on a path of solid growth."

The results beat analysts' expectations as the drop in the euro's value against the U.S. dollar makes goods produced in the 12-nation euro zone cheaper overseas. It was the index's highest level since February when it stood at 95.4.

"An economic recovery has become more likely," said Hans-Werner Sinn, president of the Munich-based institute.

The Ifo index is based on a survey of executives at some 7,000 companies.

The recent bombings in London had little effect on German business sentiment, Ifo chief economist Gernot Nerb told Dow Jones Newswires, while China's decision to sever the ties of its yuan to the U.S. dollar was positive overall.

"I can't imagine, however, that there will be a significant effect," Nerb said.


While in the UK, business confidence plunges:


World / UK Print article | Email article




--------------------------------------------------------------------------------
Main page content:
Confidence in UK manufacturing fragile
By Friederike Tiesenhausen Cave, Economics Reporter
Published: 2005-07-26 18:07 | Last updated: 2005-07-26 18:07

The CBI said on Tuesday there was little hope of a speedy recovery for manufacturing, despite signs that the worst might be over for the ailing sector, which plunged into recession in the first half of this year.

The employers’ group found that business optimism among manufacturers declined for the fourth quarter in a row in the three months to July as many companies were forced to lower prices because of weak domestic demand.

But there were glimmers of hope as the number of manufacturers reporting a decline in new orders fell compared with April. There was also an unexpected pick-up in export orders, helped by sterling’s recent fall against the dollar.

Ian McCafferty, chief economic adviser to the CBI, said: “It is clearly still tough out there but, if anything, conditions eased slightly in the second quarter. The squeeze on profit margins remains intense but things are improving from a very low base.”

He predicted that manufacturing output, which had fallen sharply in the first half of the year according to official figures by the Office for National Statistics, would remain flat in the third quarter.

The CBI also repeated its call for a cut in interest rates. The Bank of England’s monetary policy committee is widely expected to lower its main interest rate from the current 4.75 per cent by 25 basis points next week.

Neville Hill at CSFB, the investment bank, commented: “There is little evidence that the improvement in other global cyclical indicators has fed through into firmer business confidence and this is likely to support the case for a rate cut from the MPC in August.”

Mr McCafferty added that even though the economy had lost momentum he did not expect more aggressive rate cuts by the Bank in the near term. He said: “This is a modest slowdown rather than something more serious. The economy is still growing at about 2 per cent [compared with last year].”

He also echoed hopes by the Engineering Employers’ Federation that the official data could be revised upwards as they may be overestimating the extent of industry’s decline in output.

“When I am talking to manufacturers I am not getting the feeling on the whole that this is a sector that has lost one-and-a-half percentage points of output over the course of this year,” he said.

However, the CBI said the boost to exports had been concentrated on mechanical engineering and transport equipment — and many exporters were only just regaining ground lost through the fall of the dollar.

Official data on Tuesday showed British car production in the second quarter — which saw the collapse of MG Roverwas sharply lower than in the same period last year. Overall, car production was 4.3 per cent lower than a year ago. Production for the home market was 16.6 per cent lower and export market production was 1 per cent higher.

50 SPM