How far can sterling go? UK interest rates to hit 3.5%

The FT has a piece on the Pound to US Dollar exchange rate, saying that it has fallen for the past 11 days and this is the longest slide in 37 years.

Well, by some reckoning, maybe.

In 1992, it fell from 2.0100 in September to 1.4068 by Feb ’93. How far can sterling go?

Tell me where the Bank of England will take interest rates, says the FT, asserting that this is “technical analysis.” It’s not. It’s fundamental analysis.

Sigh.

The broker Tullett Prebon says that if interest rates are cut to 3.5% by the end of 2010, sterling could fall as far as 1.7000.

We’d take it a bit further to 1.6500, the most often-occurring quote for sterling over a long period.

Bye For Now

Barbara Rockefeller