£ loses 6% in early Asian Trade

[fountainhall]

Sterling crashed a staggering 6% overnight to US $1.841. No-one knows precisely why such a huge drop happened and it has been attributed to algorithms responding to a speech yesterday by Francois Hollande demanding "tough Brexit negotiations".

The currency eventually rose to #1.23 but that's still 1.5% down from yesterday's level. Those residing here on UK pensions must now be worried about how low sterling can go, if they were not already concerned.

http://www.bbc.com/news/business-37582150

[homeseeker]

I think you mean something like US $1.184 and not 1,841.
In any event on another forum someone is prediction the GBP will go to around 30-35 to the Thai Baht.

This ain't looking good at all and thousands in Thailand or proposing to come here will be affected.



This is all down to those who voted for Brexit.

[fountainhall]

I think you mean something like US $1.184 and not 1,841.
Thanks for the correction. I omitted a 1 - it should have been 1.1841.

[Old git]

The Brexit vote tripped an overdue correction - the balance of payments data evidences that - however the current falls are less rational.

During periods of relative stability, there is usually little fluctuation between the THB and USD. The GBP is currently close to an historic low against the USD, and there's no compelling reason why it should dip much further without rebounding.

Markets always react badly to uncertainty, but if you look at the realities of Brexit, not least the fact that the EU has far more to lose from an unfriendly settlement than the UK has, there really isn't any reason why it should negatively impact the value of GBP vs USD in the long term.

There is a growing disconnect between EU officialdom and the sovereign nations of europe, and a clear sense across the continent that the EU 'project' has now hit the buffers. It follows that unless Brussels can reinvent itself as a benign steadying hand, the EU as an entity will probably collapse over the course of the next decade. If it does so in an ugly fashion, that could have some negative consequences for Sterling.

On the other hand there are two reasons why Sterling may gain.


The first is Mrs May's recently expressed concern for the plight of savers and pension funds. If she follows through and leads the way back to 'normal' interest rates, Sterling will become the world's favourite currency.

The second are the rumbling warnings of a second asian financial crisis. I can't claim to be an expert on this, but I doubt Thailand is as exposed as it was in '98. Nevertheless, a major upset would not be without consequence for the THB.

Overall, on balance, I think the odds of a further fall in GBP vs THB over the coming months are marginally outweighed by the odds of a recovery, so I am not rushing to convert my pennies..

[scottish-guy]

1. The EU is not going to collapse anytime soon.
2. The UK is not (as Brexiteers think) the centre of the Universe, and to be treated as such
3. The EU does NOT have more to lose than the UK from the UK leaving the single market (which seems the direction May is going in)
4. The disgraceful plans of the British Govt to force UK employers to publish lists of their migrant workers is like something from the Third Reich - all right minded people should be appalled, but UKIPpers and Tories seem instead to be having a collective orgasm over it. Frightening.

[arsenal]

Economists try to pretend that their subject is virtually a science but most people realise it's a humanity, If your currency is strong then your exports are expensive and manufacturing suffers while your interest rates are usually high. If your currency is weak then imports go up but manufacturing can do well and your mortgage will probably cost less. It is impossible to have a full cake stand in the middle of the table while the whole populace is gorging themselves on donuts, eclairs, turnovers etc at the same time.

Scottish: I'm not sure I agree with you about the EU. I think it's in the most danger it's faced since it's inception. I'm looking at the eastern European countries and the way they have reacted to the migrant influx and their disregard for basic European law coupled with the financial crises all over the continent and I can envisage a split.

[Oliver]

Not just Brexit; according to the UK press, today's fall may be the result of "fat finger syndrome"....in other words, a cock-up.

It certainly cost me this morning; and surprised me when I collected my exchanged baht - I hadn't yet read the papers.

Ah! the joys of global capitalism! some soppy trader ( not long past puberty quite possibly), has a hangover, doesn't look at what he's doing and everyone else pays for it. We are indeed blessed to live in a world controlled by such people.

[Old git]

Scottish,

On points 1 and 3 you're in blind denial of the facts.

Point 2 is just your anti-English racism showing through.

And Point 4..

The government constantly asks large employers for various data sets to assist in national statistics gathering. So, they want to get a take on how many foreign/EU nationals are working in the UK - a perfectly reasonable exercise in the light of Brexit so they can assess the likely impact of any measures they take.

But Corbyn's hate squad (AKA Momentum) - desperate for a cause to champion.. - are trying to portray it as some sort of sinister exercise..

..and you're buying into that tosh - what a surprise!

[fountainhall]

The second are the rumbling warnings of a second asian financial crisis. I can't claim to be an expert on this, but I doubt Thailand is as exposed as it was in '98. Nevertheless, a major upset would not be without consequence for the THB
I'm certainly no expert - and don't believe most of those who say they are!

There is certainly concern about some of the currencies in Asia, due in part to the continuing strength of the US dollar, the prospect of a hard landing for China's economy and on-going pressure on the Hong Kong dollar. In 2015, the Hong Kong government spent close to US$30 billion defending its peg against the US$. The year before it was $10 billion. Not that this is causing too much concern in Hong Kong whose foreign exchange reserves are in the region of $360 billion in addition to a currency peg fund specifically to maintain the narrow band against the US$.

Interestingly Thailand is in a better position than the UK with FE reserves of $182 billion against the UK's $164 billion. That compares to the $35 billion it wiped out in the pathetic attempt to defend the Baht in 1997. What all this means - I haven't the faintest idea!

[Steve1903]

Scottish,

Point 2 is just your anti-English racism showing through.


On the whole I'm going to leave you two to your upcoming discussion however I think Old Git is talking garbage. Where is the anti English racism in point 2?

[scottish-guy]

And on point 1 he says I'm in denial of the facts - what is any way factual about his assertion that the EU will collapse?

It's not fact, it's merely his opinion or prediction

I have more respect for Arsenal's analysis of the EU situation, but all I would point out to him is that the EU is a cash cow for those Eastern European countries - so they may make a bit of noise, but I doubt they'll be voluntarily giving up their huge subsidies anytime soon

[Old git]

"Where is the anti English racism in point 2?"

Scottish has form here.

No-one south of the border regards the UK as being at the centre of the universe, but it's a common accusation from those who reside north of Berwick who harbour strong anti-English or anti-London sentiments.

[Old git]

"what is any way factual about his assertion that the EU will collapse"

It doesn't have to collapse, but it needs to reform radically to survive, and there's precious little evidence that it has the will to do so. The EU is now very similar to the Warsaw pact - arrogant, unaccountable, unwilling and unable to handle change, with inevitable consequences.

The consequences of the disastrous euro experiment are still unresolved, and when the 'member states' of this European 'union' start putting razor wire on their borders, you can see that the European dream is morphing into a nightmare.

No-one is seriously debating 'ever closer union' any more, and no-one is seriously advocating expansion any more.

- The tide has turned..

But hey, you can always go on dreaming..

[scottish-guy]

FIRSTLY:


...the EU as an entity will probably collapse over the course of the next decade..

THEN:


1. The EU is not going to collapse anytime soon...

NOW:


"It doesn't have to collapse...


You're all over the place :D

[Old git]

If you were half literate, you'd understand the meaning of the word 'probably' and if you were able to read to the end of a paragraph you'd see that whilst the EU doesn't HAVE to collapse, it's very nature makes it almost inevitable that it will..

[arsenal]

Scottish: WAS a cash cow might be nearer to the truth.

http://www.reuters.com/article/us-eu-budget-migration-idUSKCN11I1X9

As I said. I think the EU is at a crossroads. I wouldn't be surprised if Brexit didn't trigger some sort of domino effect which would be catastrophic for the whole of Europe. That, in my opinion is The UKs trump card. Don't underestimate what we bring to European table any more than only a fool would underestimate what Scotland brings to The UK. In geo-political terms...they are the same.

[Old git]

"I wouldn't be surprised if Brexit didn't trigger some sort of domino effect which would be catastrophic for the whole of Europe."

It's in no-one's interests for the EU to end acrimoniously. Had Britain not voted to leave, I suspect the French would have got more and more awkward and introspective until things came to a head, possibly badly. As it is, I'm hoping that Brexit will serve to defuse some of the tensions and allow for a more orderly retreat from the EU's impossible aspirations.

The demise of the Warsaw pact, although fraught with tension and some violence at first, then morphed into a very gentle domino effect, although old enmities did then surface in the Balkan states.

It is perhaps as well that the EU institutions do not have an army or militia that is loyal to it, a situation that makes it far easier for nations to politely walk away from its governance. I don't sense that that would be a catastrophe for anyone other than those whose noses are planted in the EU trough..

[arsenal]

Old Git: The demise of the Warsaw Pact led to carnage and war throughout eastern Europe as well as ever more bellicose behaviour from Russia. That's not to say the end of that suppression was not to be welcomed but it's not true to say it has been a gentle glide towards peaceful co-existence. It's a total hair trigger situation at the moment.

[Old git]

"led to carnage and war throughout eastern Europe"

Err.. No. Only in the Balkans where there had been shotgun weddings of different ethnic groups under the old communist regimes.

Only quite recently have the Russians become troublesome, primarily as a result of the EU trying to coax Ukraine into membership..

[scottish-guy]

... it's a common accusation from those who reside north of Berwick who harbour strong anti-English or anti-London sentiments.

For the benefit of our overseas friends on this forum - Berwick is actually 4km inside England, so one can only assume from Old Git's comment that there must be a fair few English people north of the town but south of the border who harbour such sentiments .

Which is not surprising - because in 2008 ITV carried out a referendum to find out if residents would prefer their town to be part of Scotland. The poll saw 1,182 voters in favour of becoming part of Scotland and 775 in favour of staying in England.

As for myself I am not anti-English or anti-anybody - but in terms of Brexit I would just prefer if my neighbour did not come into my house, shit on my carpet after I have told him not to, and then attempt to dicate what I can or cannot do about the smell.

[Old git]

You had your independence vote two years ago, and opinions have barely changed since:

https://yougov.co.uk/news/2016/09/01/davidson-now-more-popular-sturgeon-scotland/

Your best chance of independence lies in allowing the English to vote as well, as there's plenty who would like to kick out their endlessly whinging, ungrateful neighbours.

But what then? The Spanish would firmly veto Scottish membership of the EU (if it's still there..) because they can't contemplate a precedence for Basque or Catalan independence; and even then your finances wouldn't allow you to join the eurozone until you'd worn the mother of all hair shirts for several years.

If you tried to carry on using pounds, you'd run out of cash to pay the wages of public servants within days, and the same thing would happen if you attempted to 'do a Montenegro' and piggy back the euro - Scottish tax revenues are miles adrift of Scottish spending.

Still, you could always start minting new Scottish Bawbees - and watch hyperinflation take hold..

[RonanTheBarbarian]

I think in general that a lot of Brits seem to have an overly optimistic view of how well they are placed for the negotiations on Brexit.

Here is an article by a European in the Guardian that certainly doesnt sugarcoat it, entitled "Britain, Get real, Brexit means whatever the EU says it means":

https://www.theguardian.com/commentisfree/2016/oct/12/britain-brexit-eu-pound-euro


Here is an extract:

"As for “punishing” the UK, the EU has far too much on its plate to indulge in punitive expeditions. It will defend its national and continental interests with as much vigour as Britain will. And, since the EU is more than seven times bigger, it will impose its will".

[latintopxxx]

...oh stop being totally silly...the english are just about the only Europeans that can actually think, that have original thoughts...thats why democracy was born there....if I could i would be reincarnated as an english scally .....or failing that american trailer trash....they both turn me on soooo much....and i've had the pleasure of sampling as well....

[homeseeker]

A well known investor ( Jim Rogers)has opined that sterling will fall to under $1. It may be a few years but there is no chance of any other scenario. Scotland will leave and take its' oil with it.
The city of london will be destroyed by financial services companies leaving in droves.
Great Britain is rapidly becoming little england; and its all because the majority of those who voted for brexit are losers and half-wits and were persuaded by lies et al...
What a disaster!

[frequent]

Scotland will leave and take its' oil with it.
Thank christ for that. Will they be taking their irrelevant apostrophes with them?

[scottish-guy]

..Scotland will leave and take its' oil with it...


Thank christ for that....

Christ should have a capital C - unlike cunt, a noun which I invite you to apply to yourself with or without a capital letter.

:D