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I don't think currency movements create or destroy wealth: at most, they just shift it around. I could just as easily argue that the drop in the pound created w

I don't think currency movements create or destroy wealth: at most, they just shift it around. I could just as easily argue that the drop in the pound created wealth among the UK's trading partners. What a drop in FX rate does result in is a (possibly minor, possibly major) uptick in inflation as imports become more expensive. It also makes the country's exports more competitive since they're cheaper in relative terms. Some countries actually see a low FX rate as desirable: reduction in the exchange rate is arguably one of the channels that made QE an effective policy.

fxj 7y ago
Of course it always depends on the perspective: For a fisher man who wants to export seafood to the EU this is good news. For the average family which has to pay 20% more for everyday goods like vegetables from the Netherlands, not so much. However, Britain has a large trade deficit in goods and services, so in total it is bad news.
- ProxCoques 7y ago
  Also note that UK exporters have tended to bank the price difference rather than increase sales. Not good for increased employment. https://www.theguardian.com/business/2017/sep/15/uk-exporters-have-hoarded-gains-from-fall-in-sterling-says-ons https://www.theguardian.com/business/2017/sep/15/uk-exporter...