British Pound Trend Trajectory

By: Nadeem_Walayat

YES all currencies in free fall but for the time being at least the UK is showing relative strength against the dollar (dead cat bounce), it will eventually weaken once more to fresh lows. However as the above illustrates it is all smoke and mirrors, why I don't fuss too much over the fx rate that I buy US stocks at because at the end of the day CASH IS LOSING VALUE regardless of the currency it is denominated in! So it's a bit of a fools errand to wait for sterling to rise before buying US stocks as we have witnessed during the past 9 months.

Still to eek out that extra few percent it can be prove a useful short-term exercise to have a rough idea where sterling is going, one of the check boxes to tick off in our pursuit of maximising profits.

Stocks Bear Market Max PAIN - Trend Forecast Analysis to Dec 2023 - Part1

I would not be surprised if Sterling is above 1.30 by the end of 2023, with my central best guess being around $1.27 by late 2023. So I consider sterling today at $1.11 as being cheap in terms of the longer term outlook i.e. due a cyclical bull run within a secular bear market.

GBP peaked at $1.315 and then entered into a correction targeting $1.25 with probable overshoot towards $1.235, so about 2-3% worse than current £/$1.27 which thus should not prove much of a factor in terms of accumulating a dollar bond position. However sterling is still in a bull market so the correction is likely to resolve in a new bull market high beyond £/$1.315, against which 1.33 would be 5% better, thus if US bonds hold at current levels then would be 5% cheaper in sterling terms, so suggests better to accumulate gradually over a number of months though the opposite is true for UK bonds, i.e. to accumulate current sterling weakness, as rallying sterling would push downwards pressure on long rates.

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S&P

Targeting 4600 Mid Summer 2023 Top followed by correction to below 4150 into October 2023.

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By Nadeem Walayat

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Copyright © 2005-2023 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

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