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Sterling collapses as investors fly into dollars

hogepiyo 4y ago
Truss isn't exactly inspiring optimism to say the least, and this is when Europe as a whole already had a pretty bleak outlook. Times like these you remember those (what feel like an eternity ago) days back in '07 where 1GBP would buy you 2USD...
- mytailorisrich 4y ago
  A lot, if not most, of the movements on currency markets right now is actually the US Dollar getting extremely strong. Pretty much all currencies are recording lows against the Dollar right now, as mentioned in the article. Also note that the article does not use the word 'collapse', which is click-baity editing by the poster.
  - CentralHarvest 4y ago
    The headline was changed from the original, not an uncommon practice by Reuters.
LatteLazy 4y ago
Years of working to make our country worse have led to our country getting worse. Who could have foreseen that! The UK is in such a weird place right now. There are a group who legitimately want things to get worse because it serves their personal interest, and a group who think no matter how dumb we are, things will not get worse because we are the best country ever. They're conspiring to wreck the whole place. From Brexit to the last few PMs, to education cuts and wasteful spending, to energy "policy". It's like watching a much smaller version of the fall of rome only without the class or sophistication. /Rant
- wucaworld 4y ago
  Would you mind sharing changes you feel on the ground? I am from Canada, and feel we are facing unprecedented problems in our society. What is global, and why is created by bad policy ? Biggest issues in Canada: 1) stupidly priced real estate due to decade plus of factors (rates, building starts, land use, immigration, tax policy quirks) 2) since last year, inflation accelerated making all costs of living too high.. this lack of living wage is a key reason for the great resignation in the service sector imho. 3) tax incentives kill incentive to work. High end rates too high, support at margin seems too generous (CERB) 4) govt services being neglected .. e.g. healthcare. Stuff that remains is bloated ( civil servants getting massive raises relative to others) I hear from the news, the tax cut being proposed in the uk at least addresses #3 above. I agree that the Econ implications on inflation don’t seem to have been thought through.
  - zarzavat 4y ago
    The UK has very unstable economic policy. Despite one party being in charge for the last 12 years, each prime minister has wrought radically different economic policies. Under Cameron was austerity, services were cut and much pain was endured to “get the deficit down”. Under Johnson we had an investment-based economic policy, and then under Truss we are seeing tax cuts for the rich funded by borrowing which is an economic policy that I’m not sure has a name because it’s so stupid (Trussonomics?). Already there are some calls from within the Conservative party to remove Truss and she has only been in the job for a matter of weeks. All this time wages and services have suffered, because the political class is obsessed with ideology over the boring work of governance. I realise this is not a unique phenomenon around the world, but what seems to set apart the political class in the UK is the heady mix of egoism and delusion, that blinds them to their own incompetence until they are removed and someone else is instated.
    - wucaworld 4y ago
      Thanks for the insight. In Canada, things have been more consistent politically at least. Good point that the same party in power can still result in diverging directions. I don’t feel this as much despite changes in parties at the federal and provincial level over the last dozen years. E.g. federally, big changes were relaxation of immigration, govt support for lower income earners and cannabis legalization. Provincially (Ontario) govt services like schools and healthcare are being starved, and privatization of previously public services is on the agenda. Perhaps the water is being boiled slower than I can feel :)
timonoko 4y ago
Pound/Euro is wobbling within regular limits. So this is Euro crisis, long overdue, because Eurocrats do not follow their own rules and use euromoney to save PIGS-countries.
- rieTohgh6 4y ago
  Not really. It is energy crisis and countries that import fossil fuels are affected. I mean it might trigger the eurozone debt crisis but we are not seeing it yet.
- cool_dude85 4y ago
  This is happening because, 14 years ago, France and Germany intervened to bail out French and German banks by loading Greece with a generation of debt? That's one theory I guess.
- NoboruWataya 4y ago
  How does this follow? If it was a Euro crisis, then the euro would be down against sterling which would be stable against the dollar. That's not what we're seeing. It seems more like this is a global crisis against which the US is better sheltered than most, possibly due to its geographical position, fuel reserves, strong military and more hawkish monetary policy.

Truss isn't exactly inspiring optimism to say the least, and this is when Europe as a whole already had a pretty bleak outlook. Times like these you remember those (what feel like an eternity ago) days back in '07 where 1GBP would buy you 2USD...

mytailorisrich 4y ago
A lot, if not most, of the movements on currency markets right now is actually the US Dollar getting extremely strong. Pretty much all currencies are recording lows against the Dollar right now, as mentioned in the article. Also note that the article does not use the word 'collapse', which is click-baity editing by the poster.
- CentralHarvest 4y ago
  The headline was changed from the original, not an uncommon practice by Reuters.

LatteLazy 4y ago

Years of working to make our country worse have led to our country getting worse. Who could have foreseen that! The UK is in such a weird place right now. There are a group who legitimately want things to get worse because it serves their personal interest, and a group who think no matter how dumb we are, things will not get worse because we are the best country ever. They're conspiring to wreck the whole place. From Brexit to the last few PMs, to education cuts and wasteful spending, to energy "policy". It's like watching a much smaller version of the fall of rome only without the class or sophistication. /Rant

wucaworld 4y ago
Would you mind sharing changes you feel on the ground? I am from Canada, and feel we are facing unprecedented problems in our society. What is global, and why is created by bad policy ? Biggest issues in Canada: 1) stupidly priced real estate due to decade plus of factors (rates, building starts, land use, immigration, tax policy quirks) 2) since last year, inflation accelerated making all costs of living too high.. this lack of living wage is a key reason for the great resignation in the service sector imho. 3) tax incentives kill incentive to work. High end rates too high, support at margin seems too generous (CERB) 4) govt services being neglected .. e.g. healthcare. Stuff that remains is bloated ( civil servants getting massive raises relative to others) I hear from the news, the tax cut being proposed in the uk at least addresses #3 above. I agree that the Econ implications on inflation don’t seem to have been thought through.
- zarzavat 4y ago
  The UK has very unstable economic policy. Despite one party being in charge for the last 12 years, each prime minister has wrought radically different economic policies. Under Cameron was austerity, services were cut and much pain was endured to “get the deficit down”. Under Johnson we had an investment-based economic policy, and then under Truss we are seeing tax cuts for the rich funded by borrowing which is an economic policy that I’m not sure has a name because it’s so stupid (Trussonomics?). Already there are some calls from within the Conservative party to remove Truss and she has only been in the job for a matter of weeks. All this time wages and services have suffered, because the political class is obsessed with ideology over the boring work of governance. I realise this is not a unique phenomenon around the world, but what seems to set apart the political class in the UK is the heady mix of egoism and delusion, that blinds them to their own incompetence until they are removed and someone else is instated.
  - wucaworld 4y ago
    Thanks for the insight. In Canada, things have been more consistent politically at least. Good point that the same party in power can still result in diverging directions. I don’t feel this as much despite changes in parties at the federal and provincial level over the last dozen years. E.g. federally, big changes were relaxation of immigration, govt support for lower income earners and cannabis legalization. Provincially (Ontario) govt services like schools and healthcare are being starved, and privatization of previously public services is on the agenda. Perhaps the water is being boiled slower than I can feel :)

timonoko 4y ago

Pound/Euro is wobbling within regular limits. So this is Euro crisis, long overdue, because Eurocrats do not follow their own rules and use euromoney to save PIGS-countries.

rieTohgh6 4y ago
Not really. It is energy crisis and countries that import fossil fuels are affected. I mean it might trigger the eurozone debt crisis but we are not seeing it yet.
cool_dude85 4y ago
This is happening because, 14 years ago, France and Germany intervened to bail out French and German banks by loading Greece with a generation of debt? That's one theory I guess.
NoboruWataya 4y ago
How does this follow? If it was a Euro crisis, then the euro would be down against sterling which would be stable against the dollar. That's not what we're seeing. It seems more like this is a global crisis against which the US is better sheltered than most, possibly due to its geographical position, fuel reserves, strong military and more hawkish monetary policy.