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The Euro and Yen and almost all currencies are also down significantly vs the dollar, so I don’t think this is a Brexit thing. This is a strong US dollar thing
by christophilus 4y ago
The Euro and Yen and almost all currencies are also down significantly vs the dollar, so I don’t think this is a Brexit thing. This is a strong US dollar thing as the world grapples with collateral shortages and a relative dollar shortage.
Edit: I highly recommend the podcast “Eurodollar University” on the subject.
- pcl 4y agoIn the last 60 days, the GBP has slid from 1.20 EUR to 1.09 EUR, fwiw. It definitely looks like something other than a strong dollar.
- djbusby 4y agoEUR sliding against USD as well, right?
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- stingraycharles 4y agoYes which implies the pound is sliding against the dollar significantly faster than the euro, at least the last 60 days.
- eloff 4y agoSo almost 10% drop relative to the Euro in addition to both of them falling against the dollar. I wonder what's behind that particular weakness for the pound.
- astonex 4y agoThe government just announced tax-cuts backed by borrowing, so likely to increase inflation even further.
- stingraycharles 4y agoBut isn’t inflation usually an effect that happens after such an event, rather than something that’s being speculated on? Unless large institutions decided to sell their pounds, but that has to be a huge supply of pounds to make such an impact.
- rsynnott 4y agoBrexit plus a completely bonkers set of tax cuts. The UK will vastly increase borrowing, to give a tax cut to high income people. The markets are unimpressed.
- I-M-S 4y agoI'll admit I thought this was the kind of thing that impressed the markets? (or at least the people who make the market turn the way it does)
- walrus01 4y agoOn the other hand the USD is also nearing a really high value relative to CAD
- thehumanmeat 4y agoWow, finally someone that I find on a web forum also willing to utter the words "dollar shortage" during this time. Big props to Jeff and Emil for their generous freely available teachings. I further recommend their paid subscription too. It's well worth it. These times are easy to see coming if you had the right monetary lens on.
- djbusby 4y agoOk, so what happens next then?
- eof 4y agoThe market is going to go down a little more, then way up.
- thehumanmeat 4y agoContinuing a globally rough pace of growth until economists wake up and remake the broken monetary plumbing system.
- jerkstate 4y agoCheers to that! I'm super hopeful that the next thing the economists do will totally smooth things out, for good this time.
- scott_w 4y agoBut the GBP is down on all those currencies, too. Whatever other countries are experiencing, the U.K. is getting it double.