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The Pound takes a hammering ..... again!

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Re: The Pound takes a hammering ..... again!

Postby Tim Drayton » Thu Oct 20, 2016 4:42 pm

Currencies trade on a free market based on supply and demand. This is driven partly by trade or travel needs, and partly movements from assets priced in one currency into assets priced in another currency, and also by speculation. The last two factors are driven by investors' and speculators' perceptions of how well the economy where that currency is used will fare in the future. The currency price thus acts as a barometer as to how an economy is expected to perform. It is noteworthy that whenever the prospect of a 'soft Brexit' analogous to the current status of Norway of Switzerland, or even no Brexit at all, looks more likely, the pound rises and whenever a 'hard Brexit' looks more likely, Sterling gets hammered. The market is basically saying that the UK economy will fare badly if there is a 'hard Brexit'. This may be unpalatable or downright incomprehensible to the average Europhobe bigot down in the pub, but that's the way it is.
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Re: The Pound takes a hammering ..... again!

Postby Tim Drayton » Thu Oct 20, 2016 5:13 pm

Lordo wrote:
Londonrake wrote:
miltiades wrote:Encouraging StG performance over the last 3 days, standing at just under 1.12 euros and 1.23 US $.

A glimmer of hope ?

Monday I made a small transaction in euros using the same brokers that I have used for a number of years, I had a long chat with an operative and asked of his and his team's opinions, predictions etc. Apparently he tells me that Stg will soon settle at around 1.15 euros, way down of course from the pre Brexit vote but nevertheless encouraging .

I'm not so confident of this happening but I do hope it does stabilize at least at the level of 1.15.

I expressed to him my own views but respected the fact that he and his team are far more involved in currencies than I'm .


I hope you're right Milti and things take an upturn. Albeit just a gradual one at present. A little less pain for you perhaps (Well, for us all!) :D .

I do find it difficult not to conclude though that those who can influence sterling are using a "carrot and stick" strategy in order to manipulate opinion. Talk of "Hard Brexit" the £ drops. Talk of involving Parliament in the Brexit negotiating process, the £ recovers.

Perhaps though I am just being............................... conspiratorial. :shock: :lol: :wink:

was it not you who claimed that it was all scaremongering on behalf of the remainers. you got what you wanted and you will suffer the pain once we are out. what we have seen so far is nothing compared to what we are going to suffer once we are out. the only problem is that some of us did not want it and will also suffer the consequences. what can you do when stiupid people allow themslelves to be led by people who are more stupid themselves and are too stupid to realise it.


Just a tongue in cheek idea, but could partition be the answer? Split the territory 52:48 into two countries and the leavers take the 52%, their country leaves the EU and they suffer the consequences, while those who wanted to remain don't. Of course, London including the City stays in as there was strong support for remain there.
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Re: The Pound takes a hammering ..... again!

Postby Maximus » Fri Oct 21, 2016 1:33 am

Sorry guys, there is no hope for the GBP until the fundementals change.
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Re: The Pound takes a hammering ..... again!

Postby Paphitis » Fri Oct 21, 2016 2:12 am

seriously. probably the strongest EU economy going and they need to change their fundamentals.

I think you should change the fundamentals (thinking) of your brain.
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Re: The Pound takes a hammering ..... again!

Postby miltiades » Fri Oct 21, 2016 6:05 am

Germany is by far the biggest economy in EU. " Germany has not posted an annual goods trade deficit in any year since 1951 "
" German foreign trade balance showed a surplus of €247.8bn in 2015, which was the highest value ever recorded. It exceeded the previous year's peak of €213.6bn. In 2013, the surplus of the foreign trade balance had been €197.6bn."

The pound has fallen dramatically since the Brexit vote at the end of June.

It declined to a three-year low against the euro following Theresa May's announcement that the UK would begin formal Brexit negotiations by the end of March.

Since the referendum, it has fallen about 18% against the dollar since the referendum, to levels not seen since 1985. On 20 October the pound was worth $1.22.

Against the euro, on 20 October it was worth about €1.12. A year ago it was worth €1.35.
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Re: The Pound takes a hammering ..... again!

Postby Paphitis » Fri Oct 21, 2016 7:08 am

Germany is a larger country than Britain. Only natural that the German economy is bigger.

Trade deficits are not a measure of whether an economy is doing well or badly. The best parameters to use are GDP Growth, Unemployment Rates, and Consumer Confidence.

http://www.tutor2u.net/economics/refere ... imbalances

Britain has 4.9% unemployment. Germany has 4.6% unemployment. Not a big difference there.

the latest GDP figures for Britain are for GDP growth of 1.7% which exceeds Germany's 0.1% growth.

Germany GDP growth of 0.1%

https://www.google.com.au/webhp?sourcei ... GDP+growth

British GDP Growth of 1.7%

https://www.google.com.au/webhp?sourcei ... GDP+growth

So based on the evidence, I would say that britain's economy is a hell of a lot more healthy than the German economy.
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Re: The Pound takes a hammering ..... again!

Postby Paphitis » Fri Oct 21, 2016 7:11 am

BTW, Theresa may has briefed EU Leaders that Britain will trigger article 50 by March next year at the EU Summit.

The 27 EU leaders stressed that the divorce negotiations will be conducted in a manner that will ensure great EU/British relations moving forward beyond the BREXIT.
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Re: The Pound takes a hammering ..... again!

Postby Tim Drayton » Fri Oct 21, 2016 8:13 am

Swing of 19.3% to the pro-EU Liberal Democrats in yesterday's Witney by election.
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Re: The Pound takes a hammering ..... again!

Postby Tim Drayton » Fri Oct 21, 2016 8:13 am

Paphitis wrote:BTW, Theresa may has briefed EU Leaders that Britain will trigger article 50 by March next year at the EU Summit.


Yes, they have already kicked the can down the road for nine months.
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Re: The Pound takes a hammering ..... again!

Postby Paphitis » Fri Oct 21, 2016 8:30 am

Tim Drayton wrote:
Paphitis wrote:BTW, Theresa may has briefed EU Leaders that Britain will trigger article 50 by March next year at the EU Summit.


Yes, they have already kicked the can down the road for nine months.


You mean 5 months. She said it will be triggered by March 2017.

She said that a few weeks ago and she again repeated the same thing at the EU Summit as the EU were eager to get an update.
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