UK Economy and future of sterling (safe, to move, long term)

[London Girl]

Given the recent and ongoing economic turmoil I'm really starting to get concerned about both USD and GBP - whilst resident in the US I also have assets in the UK and given the recent dip in the value of sterling am wondering if/when it might/might not be a good idea to convert currency.

Convert now into an equally vulnerable currency?

Leave in sterling?

I have little faith in either pounds or dollars to be honest.

Any thoughts?

This website presents some interesting (and not very encouraging) thoughts on the US and UK.

CynicusEconomicus: Fighting on the Edge of a Cliff - The US and China

[themeone]

Over the past 6 months the pound has weakened against pretty much every major currency, so surely there's no point trying to move any sterling assets as you'll get so little for them.

[Scotslass]

I would stick with sterling.

[Mag3.14]

Lots of economists believe that sterling will collapse in 2009. Even though many believe the same could be true of the US dollar, it seems that many governments, and large investors are dumping holdings in sterling, in favour of the greenback. Confidence in the long term viability of the euro is also low.

Wether or not the dollar will collapse will largely depend on the 'buy American' provision in America's $900bn stimulus package.

[Jaggy001]

The reason that sterling has collapsed so spectacularly is that investors believe that the UK economy is in even worse shape than the US one. The dependence of the UK economy on services - and especially financial services - has made it very vulnerable to this downturn.

The dollar appreciated against other currencies at the onset of the global liquidity crisis as investors looked for a safe haven. However, as liquidity improves, the fundamentals which led to a strong Euro will come back into play and both the dollar and pound will continue to depreciate against it.

As such, I would be tempted to go into Euros in the medium term.