Pound falls vs. Dollar after reports say May will announce likely exit from EU single market in Tues


#1

Pound falls vs. Dollar after reports say May will announce likely exit from EU single market in Tues. Brexit speech. data.cnbc.com/quotes/GBP%3D


#2

The last I saw, the dollar was up against all the major currencies, so that might not tell us much about the pound, particularly.

But I think it’s likely the pound will take a hit the closer Britain comes to Brexit. Might be a buying opportunity, like when the DOW futures dropped 900 points when it became clear that Trump had won.


#3

It’ll bounce back unless the UK government really messes things up. But aside from their reservations about Brexit and the black hole that is the NHS, this conservative government under May should be able to steer a ship that will become the epicenter for European commerce—IF they can get out of the EU completely and sooner rather than later.


#4

London currently IS the epicentre for European commerce - world commerce, actually.

That could under threat in the years to come now.


#5

One would expect this to change at the convenience of the EU.


#6

The pound can take advantage of the potential of more tourists spending. It’s not as if the Sterling is crashing. Spoiled Westerners. :slight_smile:

Todays quotes,

1 British Pound equals 1.24 US Dollar
1 Euro equals 1.07 US Dollar
1 Swiss Franc equals 1.00 US Dollar
1 Chinese Yuan equals 0.15 US Dollar
1 Mexican Peso equals 0.046 US Dollar
1 Russian Ruble equals 0.017 US Dollar
1 Japanese Yen equals 0.0088 US Dollar


#7

Certainly, there has never been a more advantageous time to visit London (or Edinburgh or other major British cities) if your from outside the UK.

Foreigners will actually find it affordable for once :smiley:

I suppose every cloud has a silver lining but we - the British consumers and taxpayers - will not be benefiting from plummeting sterling and burgeoning inflation over the next five years (already, with nearly two months still to go until Brexit actually begins with the triggering of Article. 50, inflation is the highest its been in close to three years with a high of 1.6% - and freaking Brexit hasn’t even started yet).

The pound in your pocket will be worth much less abroad if you are a British holidaymaker, while back home prices will be continually rising.

I really, really am not looking forward to this (as I see it) wholly unnecessary squeeze on our finances as the country embarks on a wholly uncertain future for the purpose of an enterprise that will never offer us anything better, and most likely something far worse, than what we had before…but if that’s what ‘Her Majesty’s’ government wants then so be it…I’m just a lowly subject of the Crown after all, aren’t I?

But let me tell you, when the lower-income Brexiteers in those English ‘Tory Shires’ start rioting down the line, as the economic toll begins to dawn for them and their privileged ‘turbo-libertarian’ overlords in the Capital remain fine and dandy, I for one will have little sympathy…You reap what you sow, after all. They should have listened to those who actually cared for their interests and the common good as a whole, rather than the far-right ideologues obsessed with destroying British manufacturing and warping us into a super-charged version of a Singaporean ‘tax haven’ for foreign oligarchs. “Take back control”, indeed. :rolleyes:


#8

If inflation lasted 5 years it would be horrible for lower-income folks. I’d hope the bankers of the UK can help stabilize the situation in a year or so. As long as the EU doesn’t start talking tariffs. Theresa May is correct, the UK should expect tariff-free trade with Europe since South Korea has a free trade agreement with the EU.

The tightened spending may be shared if we get hit with a bit of inflation here in the US, over the next few years. Something that may be a safe idea to anticipate.


#9

You have to consider though that we far more dependent upon access to the EU Common Market than South Korea is.

We don’t have to fear just tarifs - we have to fear also the re-erection of so-called “non-tariff barriers” which have been abolished in Europe through a harmonization of national legislation. If we “fall of the cliff-edge” and don’t get a good deal with Europe, we can say ‘bye-bye’ to passporting rights for British companies in the Single Market.

I hope you are right about the U.S. but I cant deny that I am worried - very worried. The economy did well last year, mainly on the back of consumer spend which ignored the Brexit vote. The reason, of course, is that contrary to what was promised before the referendum Cameron resigned without triggering Article. 50. and it still hasn’t been triggered yet. So without any economic “pain”, the Bank of England was wrong to expect that people would tighten their belts.

Not until today has May actually “shown her hand” and indicated what kind of Brexit she is going for. On the one hand, that’s reassuring for investors and the markets - finally some certainty. On the other hand, it will strengthen arguments that some banks and financial services firms may have to consider relocating to continue to operate in the world’s largest single market of goods, capital, services and labour. A weaker pound has raised the costs of imports such as food and fuel, and businesses are starting to pass that on to consumers.

That’s bad.

In terms of our “trading relationship with the EU”, I honestly hope for the best but on a personal level I am preparing for the worst. The EU obviously wants a mutually beneficial relationship with the UK but it is not prepared to simply grant them privileged market access a la carte - as if the UK can have all the benefits without any corresponding obligations. It will act no.1 in the interests of the EU-27 member states, not of Britain.

May seems to have realised this and her ‘Hard Brexit’ rhetoric could be interpreted as a gentle, coded nudge to the UK population: “expect a bumpy road ahead”. For those who long for secession from the EU, the “promised land” may be worth years of wandering in the desert after the Exodus but I just do not think that the majority of ordinary folk in the UK will see it that way three years from now.

I sincerely hope I’m wrong and its all a big surprise for the good but I don’t expect that to be the case. Even as a long-shot bet.


#10

Not just visiting but retiring there. Their SS checks go farther and they speak the same language, although that’s debatable. :slight_smile:


#11

You are very welcome and you’ll go far with the dollar at the moment - unless, of course, your currency also drops in future and inflation rises. Can we PLEASE, pretty please share the pain? :smiley: :stuck_out_tongue:

As for language, that brings back a few memories…

I remember asking my American cousins from Arizona, when they came on vacation to Britain, where the “loo” was located.

They looked at me with apparent incredulity saying, “Huh? What’s that”?

I answered, “Um, well, I mean the lavatory…” (thinking I’d been too informal)

Nope.

"The toilet…you know?’

Blank faces.

“The…the latrine, the privy then?”

Blank again.

“The bathroom? Room 100…?”

It took them a while to realize I had meant the “restroom” (I had never heard it called that before, or “washroom” which I think Canadians use more).

Later that same day they asked a guard in a museum for directions to the “restroom”. He replied, “Sorry but there’s no place here for you to lie down, sir.” Should have listened to me. (True story…:stuck_out_tongue: )


#12

My brother and I each hold dual citizenships and I told him once to be careful of what we say or they’ll deport us back to England. He replied, well it won’t be the worst thing in the world. :slight_smile:


#13

A little inflation isn’t harmful. Might even be helpful. When it’s out of control, it’s bad. What we have had here is modest price inflation with wage deflation; the worst of all worlds.

Inflation actually accelerates spending, or so that has been the case here in the U.S.


#14

A relatively modest or slow increase in prices of food, energy and mortgage rates won’t be overly harmful to many. It does change quality of life for some more than others. The middle-class can adapt spending habits and actual avoid unnecessary debt, if they are prudent. Depending on how much of an increase there is the lower-income folks can get hammered. Especially with less charitable donations by the middle to upper middle-class.

There’s always upsides and downsides. :shrug:


#15

The cause of inflation also enters into how damaging it is to people. Land prices increase naturally if the population is growing because the supply of land is stable. Will Rogers understood this when he advised people to buy land because, “They ain’t making more of it.” This natural inflation allows people to plan for it.

However, when the government chooses to support real estate prices by tax deductions for mortgage interest and property taxes and passes regulations forcing banks to lend to people who could not qualify for loans in a free market, it puts upward pressure on prices. Government does the same by forcing land off the market by creating national monuments, or passing restrictive zoning regulations. When prices go up because government is increasing demand and reducing supply, people who already own property benefit while people who want to buy are hurt. Government normally compensates for this with still more programs that result in more inflated prices, like special capital gains treatment for a principal home, and subsidies for other people to buy homes. Real estate is probably the most government subsidized part of our economy. This kind of inflation is dangerous because what the government gives today, it can take away tomorrow. This kind of artificial inflation caused a major recession not long ago.

How many young people do you know who want to be farmers by buying enough land to start from scratch? Is that reasonably possible?


#16

Currencies are a huge market and move for many reasons. The US dollar has been strong recently because our economic growth is stronger than other developed countries and is predicted to grow even faster under the policies of a President Trump. The dollar is also stronger because our interest rates are higher than many other countries, and people who want positive yields and growth will invest here. The US dollar is also stronger because the US is still seen as a safe haven that will not confiscate your savings for political reasons. Countries like Switzerland are no longer a good place to hide assets from your government, so we don’t have as much competition from them.

Many Americans who see our 2% growth and almost zero interest rates on savings will be shocked to learn we have it a lot better than most countries. They need to learn the facts and deal with them.

Free tip for small savers: Do your homework. Most of the big banks like Chase are now paying 0.01% interest on savings accounts. Discover Bank is paying 0.95% and GS Bank(Goldman Sachs) is paying 1.05% with full FDIC insurance at both. Put another way, GS Bank is pay 105 times as much interest as Chase. You can easily transfer money from a local bank to an on-line bank and move it back to a local account when needed. You are limited to six withdrawals per month without fees.


#17

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