Skip to main content

Global Economy: US dollar rises amid fears of global slowdown

Pound took a massive beating as US dollar rose to a 37 year high. Global economy is facing a typical "ceiling effect".



Quoting FT's technical analysis:

With UK rates set to decline and US rates possibly rising, sterling only has further to fall. If the pound fails to stop its descent at $1.80, its drop could easily extend to $1.70.

Then there are fundamentals, those elusive forces that are supposed to guide long-term currency values. The key metric here is purchasing power parity. This is the idea that, after adjusting for exchange rates, an identical good will cost the same wherever you are. Here the prognosis is even more gloomy. Take the Big Mac, a yardstick of fair value popularised by the Economist magazine. Even after taking into account sterling’s recent fall, a burger still costs $3.57 in Chicago against $4.26 in London. To bring those prices into balance, sterling needs to fall to $1.56.


It is not far that ECB will be forced to cut the rates sooner than expected.

Comments

Popular posts from this blog

Security: VMware Workstation 6 vulnerability

vulnerable software: VMware Workstation 6.0 for Windows, possible some other VMware products as well type of vulnerability: DoS, potential privilege escalation I found a vulnerability in VMware Workstation 6.0 which allows an unprivileged user in the host OS to crash the system and potentially run arbitrary code with kernel privileges. The issue is in the vmstor-60 driver, which is supposed to mount VMware images within the host OS. When sending the IOCTL code FsSetVoleInformation with subcode FsSetFileInformation with a large buffer and underreporting its size to at max 1024 bytes, it will underrun and potentially execute arbitrary code. Security focus

Virtualization: GlassHouse hopes to cash in with its IPO!

GlassHouse Technologies Inc. on Tuesday registered to raise as much as $100 million in an initial public offering that, despite the company's financial losses, could prove a hit with investors drawn to its focus on "virtualization" technology. The Framingham, Mass., company offers consulting services for companies that use virtualization software to improve the performance of corporate servers and cut costs in their data centers. GlassHouse also provides Internet-based data storage. "Software-as-a-service," or SaaS, companies and vendors of virtualization products have proved popular among investors in recent years as corporate customers seek alternatives to conventional packaged software. GlassHouse, with roots in both sectors, will test the strength of that interest, said Peter Falvey, managing director with Boston investment bank Revolution Partners. "It will be a bit of a bell weather," he says. "It's not as though it's the 15th SaaS m...