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Brexit and its potential impact on the value of sterling...

  • #21
  • May 1, 2018 6:29am May 1, 2018 6:29am
Quoting The Cableguy
Just to add a TA perspective... the pullback from the lows can be contained in one channel - that suggests PA has been 'corrective'. The consequence of which means we have not had the low yet. My bet, if i were to trade such way, (although i must add that i do not!), would be for parity or as near as dammit, is on the cards, sometime in the future; {image} Trend is still down in the overall grand scale. That will cease if we break the pre Brexit high (around 1.50), as it stands, it very much looks like we've tapped prior Supply and it is game over...
Just wondering how much of GBP weakness of late has to do with USD strength (yield advantage).

Ever since US 10yr yields approached 3%, USD has been on an upwards trajectory against all the majors.

If something was to de-hinge this (Trump tweet, Fed meeting tomorrow, potential close down in Sept.), we could see a powerful reversal especially if everyone is one side of the market.

The EU and US aren't exactly the cleanest shirts around, they have their own issues ie debt, splintered politics (at local and national levels). What could potentially "save" GBP from a severe fall is the fact that the EU is dependent upon the UK and it's contributions and it has issues of it's own. Hardly think the EU want the Eur to appreciate too much vs GBP.
  • #22
  • May 1, 2018 6:48am May 1, 2018 6:48am
Quoting Spreadbetter
Imho sterling parity with the euro can’t be ruled out. Let’s not forget that back in September 2017 we flirted with 95.00. {quote}
Agreed Spreadbetter. If we crash out of the EU with no transition agreement I think EURGBP reaching parity is a distinct possibility. In fact it would not be beyond the realms of possibility that EURUSD and GBPUSD all reach parity at some stage or other in the aftermath. Speaking from a (strictly) traders perspective it would be interesting times indeed. The potential catastrophe to the UK economy of crashing out though was enough for the Lords to see some sense and vote yesterday against this, and would result in the negotiators being sent back to the negotiating table in the event of no deal.
Everything will be okay in the end. If it's not okay, it's not the end.
  • #23
  • May 2, 2018 2:39am May 2, 2018 2:39am
It’s all beginning to fall apart, now May is faced with a cabinet and Tory MP revolt over her pathetic suggestion of a hybrid “customs partnership”, which the E.U. have already rejected out of hand back in February and reaffirmed their position last month, stating there’d be no tailor made deal which risked free movement. This wasting time and perpetual misdirection is finally reaching a dead end, GBP has been relatively stable throughout the last 6 months, imho this is about to change as the clock ticks down unmercifully.
"The meek shall inherit the earth.." Yeah right, good luck with that shit..
  • #24
  • Edited 3:01am May 2, 2018 2:50am | Edited 3:01am
The jobs loss estimate, for the City of London as a consequence of Brexit, is put at approx. 75,000, according to the govt. treasury and other sources. This fails to take into consideration the ancillary ripple effect job losses, greater London will see a jobs contraction of circa 350,000 and these will be well paid jobs generating tax revenue and service jobs and activity. The treasury also estimates a loss of 10% to U.K. GDP, effectively that’s ushering in a completely avoidable recession...

GDP growth has slumped to 0.2%, the CBI latest trend survey is dismal, manufacturing PMI is falling as is services, with construction PMI just above recession, whilst retail sales are collapsing, as retailers slash prices to find buyers and mass lay offs throughout many sectors are gathering steam, we’re in a shocking position to weather any storms and we haven’t even left yet...

It’s complete chaos and right now the U.K. doesn’t have an effective government which will kill inward investment. I suspect volatility to increase in sterling as the FX markets begin to react in a far more aggressive manner to any Brexit developments, than we’ve witnessed over recent months.


Quoting synicz
Not sure if this counts as pure brexit talk but I shall make my case. I honesthonesthonestly cannot see how Brexit can be good for the pound. It is a politial dilemma on both parties as to what action to take. Allow me to make my case by first looking at the UK's economy post-referendum. {image} GBP dropped sharply following the months post referendum. Attached is the chart of GBPUSD. GBP depreciate over 18% against the USD! As a result, inflation was pushed up sharply because of the rapid depreciation of the pound. {image} In the meantime, wage...
"The meek shall inherit the earth.." Yeah right, good luck with that shit..
  • #25
  • May 2, 2018 3:00am May 2, 2018 3:00am
Quoting Spreadbetter
The jobs loss estimate, for the City of London as a consequence of Brexit, is put at approx. 75,000, according to the govt. treasury and other sources. This fails to take into consideration the ancillary ripple effect job losses, greater London will see a jobs contraction of circa 350,000 and these will be well paid jobs generating tax revenue and service jobs and activity. The treasury also estimates a loss of 10% to U.K. GDP, effectively that’s ushering in a completely avoidable recession... GDP growth has slumped to 0.2%, the CBI latest trend...
Yeah. It does seem bad for both the sterling and the UK economy. Although I would be weary of discounting any negative impact from political instability. As it is not as concrete as economic data. But yes, overall outlook for UK is bad.
I look for value wherever it can be found
  • #26
  • May 2, 2018 6:54am May 2, 2018 6:54am
Over-65s were more than twice as likely as under-25s to have voted to Leave the European Union

We have now weighted our final poll to match the headline result, and the detail within it gives the best possible indication of how Britain actually voted last Thursday.

The vote to Leave exposed significant divisions within the country, as every region of the country except Scotland, Northern Ireland and London voted to Leave. Geography is not the only fissure in the country. Voters differed significantly according to age and education.

The most dramatic split is along the lines of education. 70% of voters whose educational attainment is only GCSE or lower voted to Leave, while 68% of voters with a university degree voted to Remain in the EU. Those with A levels and no degree were evenly split, 50% to 50%.

Age is the other great fault line. Under-25s were more than twice as likely to vote Remain (71%) than Leave (29%). Among over-65s the picture is almost the exact opposite, as 64% of over-65s voted to Leave while only 36% voted to Remain. Among the other age groups, voters aged 24 to 49 narrowly opted for Remain (54%) over leave (46%) while 60% of voters between the ages of 50 and 64 went for Leave.


https://yougov.co.uk/news/2016/06/27/how-britain-voted/
"The meek shall inherit the earth.." Yeah right, good luck with that shit..
  • #27
  • May 3, 2018 3:34am May 3, 2018 3:34am
Quoting Spreadbetter
Over-65s were more than twice as likely as under-25s to have voted to Leave the European Union We have now weighted our final poll to match the headline result, and the detail within it gives the best possible indication of how Britain actually voted last Thursday. The vote to Leave exposed significant divisions within the country, as every region of the country except Scotland, Northern Ireland and London voted to Leave. Geography is not the only fissure in the country. Voters differed significantly according to age and education. The most dramatic...

Makes perfect sense.

I thought all 16 year old's should have had the right to vote in this matter. Why? Because they are the ones who will have to live through the consequences of the decision so why should they not have been given a chance to vote?

https://www.cnbc.com/2017/08/01/leave-voters-thinking-brexit-is-worth-damaging-the-economy-poll.html

http://www.businessinsider.com/yougov-poll-leave-voters-happy-for-relatives-to-lose-jobs-over-brexit-2017-8?r=UK&IR=T


Above links shows an interesting, if selfish attitude, of many of the leavers (usually from deprived areas in the North or Midlands).

Not to sound disparaging, many (if not all of these) were people who were long term un-employed and who didn't exactly have a comfortable life. Many of these have the attitude, "if i can't have it, I don't want other so have it either" - Selfish.

Do I blame them? I can understand the reasoning. Successive UK governments have long neglected the North and Midlands over the South. The traditional industries of these areas have all but disappeared, gone abroad where cost of labor is substantially cheaper. Globalization has caused low skilled workers (outside of service industry) to really suffer.
  • #28
  • May 3, 2018 3:49am May 3, 2018 3:49am
To divert a little, and in the interest of balance:

"What would EU loose as a result of UK leaving"?

Am already hearing of a gaping hole in EU funding which many of the countries are refusing to fill.

http://www.agriland.ie/farming-news/five-eu-countries-refuse-to-fill-brexit-budget-gap/

I know below is from The Express (deeply Pro Brexit) but hey
https://www.express.co.uk/news/world/940682/brexit-news-european-union-budget-black-hole-italy-veneto


From below:
https://www.newstatesman.com/politics/staggers/2017/04/what-brexit-means-rest-eu

"...The UK is the EU’s second biggest economy, and after its exit the combined GDP of the non-euro member states falls from 38% of the eurozone GDP to barely 16%, or 11% of EU’s total...."


So the EU has a lot to loose too - further erosion of economic and financial standing between north and South Europe? Further rise of nationalism based on economic collapse which leads to further splitting of the EU?

How much can the ECB continue to step in to shore up poor credit of individual countries? The rates on many Southern EU countries is a joke - Italy 10yr bond at 1.785% is a joke. It should be at least in 5%-6% range considering their political situation and their debt levels.

So perhaps the above will stop too great a fall in GBP especially vs the EUR?

Interesting times!!!
  • #29
  • May 3, 2018 3:59am May 3, 2018 3:59am
It's all fairly predictable though, isn't it? I mean, surely no-one thought we would just leave and start seeing benefits straight away?

I always said that we would suffer for several years first, but when it turns around we will be like a bigger Switzerland (or massive Monaco!))).

The EU is finished, it's just that the discontent has gone quiet in the media for a while. It's still simmering. Probably sometime after Russia implodes.
GoFundMe -stage-4-glioma-brain-cancer-fighter (link in my profile)
  • #30
  • Last Post: May 3, 2018 10:33am May 3, 2018 10:33am
Quoting The Cableguy
It's all fairly predictable though, isn't it? I mean, surely no-one thought we would just leave and start seeing benefits straight away? I always said that we would suffer for several years first, but when it turns around we will be like a bigger Switzerland (or massive Monaco!))). The EU is finished, it's just that the discontent has gone quiet in the media for a while. It's still simmering. Probably sometime after Russia implodes.
Monaco or Switzerland? I seriously doubts that.

Monaco and Switzerland have a population of 7mn and 8mn - London alone has that.

These countries are tiny, devoid of all the different sub-cultures and socio economic groups that we have in the UK.

How exactly will the UK raise its standard of living and wealth for all it's citizens to match those of Switzerland/Monaco?

Monaco has about 300 soldiers in its entire army (even that figure is too high I think).

Please provide some meat on the bone on how the UK will within say ten years turn in to a bigger version of Switzerland?
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