£ slumps 10% as Boris directly leads to inflation Watch

ecolier
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#21
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#21
(Original post by Realitysreflexx)
...i earn in euros...
So jealous
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imlikeahermit
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#22
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#22
(Original post by The RAR)
Ok, as someone who supports Brexit that is making me pretty concerned. I really am starting to look back if I supported the right side
It’s about time people like you woke up to the reality of the situation.
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Realitysreflexx
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#23
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#23
(Original post by ecolier)
So jealous
The £ might comeback... The only thing that's really disheartening is wages simply are soooooo low even in professional jobs... Only the lucky few make more than £50,000 so how do wages rise to reflect the rapid loss in value.. They simply don't won't fast enough... But maybe this is good, maybe UK wages will finally rise rapidly. Then the £ can churn higher one day and living standards will rise but that's a very long term view.
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ecolier
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#24
(Original post by Realitysreflexx)
The £ might comeback...
Back in 2008 (when I was a student but not working), the £ was worth US$2.2 or something ridiculous.

Now I'm earning and there's this

...But maybe this is good, maybe UK wages will finally rise rapidly.
One can hope, but I doubt it'll happen - especially for government / the civil service.

Then the £ can churn higher one day and living standards will rise but that's a very long term view.
:rofl: I wish.
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Good bloke
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#25
(Original post by Realitysreflexx)
Very odd phenomenon but it makes perfect sense, £ falls off a cliff investors sell bonds quickly and try to get into firm's with export exposure.
That must explain why bond yields are extremely low and falling, then. :rolleyes:
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Realitysreflexx
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(Original post by Good bloke)
That must explain why bond yields are extremely low and falling, then. :rolleyes:
Yeah but it's silly really... If your losing the value in the £ then the shares are de facto worth less too lol. But can't do much else, since you don't want to jump in another currency because then you'll lose even more lol.

But i guess over the near short term makes sense.. they have more potential to the upside to balance it out 😂😂.
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Jammy Duel
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#27
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#27
(Original post by Realitysreflexx)
The city doesn't make the market for the £ alone the wider (global) currency market does.

Though oddly that rally in the FTSE yesterday was strong... It will push money into shares.

Very odd phenomenon but it makes perfect sense, £ falls off a cliff investors sell bonds quickly and try to get into firm's with export exposure.
The city being used as a substitute for "Forex traders around the world", it also isn't odd at all that FTSE strengthens when sterling falls given overseas profits are worth more in sterling terms.
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Quady
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#28
(Original post by Realitysreflexx)
Yeah but it's silly really... If your losing the value in the £ then the shares are de facto worth less too lol. But can't do much else, since you don't want to jump in another currency because then you'll lose even more lol.

But i guess over the near short term makes sense.. they have more potential to the upside to balance it out 😂😂.
Why would Shell be worth less in sterling with a sterling fall?
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Reue
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#29
(Original post by Fullofsurprises)
Inflation will rocket and many goods will be unavailable.

!RemindMe 1 Year
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maachu_pichuu
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#30
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#30
(Original post by Quady)
Why would Shell be worth less in sterling with a sterling fall?
Royal Dutch Shell earn in US Dollars mostly, so a Sterling fall benefits them.
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maachu_pichuu
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I wouldn't worry too much, no deal brexit will lead to a £1= $1.1. This is good for exporters, bad for importers. Anything imported with incur inflation, which will lead to BOE rate rises to stop it, which will slow down the economy. When the BOE puts the brakes on (or any central bank) you go through the windshield. Will we see a recession, maybe?

If you are invested in the market, it makes sense to have a dollar position now. Having stocks in dollars will benefit from the £ devaluing, once brexit is over, you take the reverse trade and start piling into UK domestic stock earners.
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barnetlad
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#32
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#32
(Original post by Quady)
As basically as scary as 1985 :O
I cannot imagine that the government of Margaret Thatcher was as bad as this. The only good thing about the Johnson government is that it does not include Chris Grayling.
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Fullofsurprises
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#33
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#33
(Original post by maachu_pichuu)
I wouldn't worry too much, no deal brexit will lead to a £1= $1.1. This is good for exporters, bad for importers. Anything imported with incur inflation, which will lead to BOE rate rises to stop it, which will slow down the economy. When the BOE puts the brakes on (or any central bank) you go through the windshield. Will we see a recession, maybe?

If you are invested in the market, it makes sense to have a dollar position now. Having stocks in dollars will benefit from the £ devaluing, once brexit is over, you take the reverse trade and start piling into UK domestic stock earners.
Unfortunately it isn't as simple as low pound = more exports. Most of our really big exporters, like the car industry, aviation, Big Pharma, etc, use large numbers of imported components which they assemble in the UK and then re-export as finished goods. The price of all of these will be higher, making their product uncompetitive, even with the low pound.

A lot of big corporations set up in the UK precisely because (a) it was within the EU and (b) the £ was seen as strong and stable.
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Fullofsurprises
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#34
(Original post by barnetlad)
I cannot imagine that the government of Margaret Thatcher was as bad as this. The only good thing about the Johnson government is that it does not include Chris Grayling.
I am confident he will be brought back in before long, to rescue the economy. :toofunny:
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Jammy Duel
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(Original post by Realitysreflexx)
Yeah but it's silly really... If your losing the value in the £ then the shares are de facto worth less too lol. But can't do much else, since you don't want to jump in another currency because then you'll lose even more lol.

But i guess over the near short term makes sense.. they have more potential to the upside to balance it out 😂😂.
It makes them cheaper in non sterling terms which potentially makes them a more enticing option for non-sterling traders, especially if they expect strengthening of sterling in the future in which case not only do they benefit from the shares/bonds themselves but also upon sale
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maachu_pichuu
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#36
(Original post by Fullofsurprises)
Unfortunately it isn't as simple as low pound = more exports. Most of our really big exporters, like the car industry, aviation, Big Pharma, etc, use large numbers of imported components which they assemble in the UK and then re-export as finished goods. The price of all of these will be higher, making their product uncompetitive, even with the low pound.

A lot of big corporations set up in the UK precisely because (a) it was within the EU and (b) the £ was seen as strong and stable.
The £ will always be strong under a conservative government that is pro business, we are just dealing with a messy divorce here which is hammering the currency. The problem like you say is we import more than we should, I don't think many poor people can afford a 10-15% rise in food costs. This will hurt discretionary spending and possibly send us into recession.

I manage a portfolio of stocks worth around £100,000, half of which are in US dollars. I benefit from the £ weakening, although I need to keep some UK stocks if the £ strengthens after brexit.
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Fullofsurprises
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#37
One thing that would be quite interesting to know is how many of Boris's buddies and wider circle friends of the likes of Dominic Cummings are hedge fund managers and city traders with huge anti-pound shorting positions. They will all be doing awfully well right now. Makes one think about that bit where he said that people who bet against Britain are going to lose their shirts. Not right now they aren't.
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maachu_pichuu
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#38
(Original post by Fullofsurprises)
One thing that would be quite interesting to know is how many of Boris's buddies and wider circle friends of the likes of Dominic Cummings are hedge fund managers and city traders with huge anti-pound shorting positions. They will all be doing awfully well right now. Makes one think about that bit where he said that people who bet against Britain are going to lose their shirts. Not right now they aren't.
Mogg (Somerset Capital Management) is shorting the pound, so is his friend Crispin Odey (Odey Asset Management)
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Fullofsurprises
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#39
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#39
(Original post by maachu_pichuu)
The £ will always be strong under a conservative government that is pro business, we are just dealing with a messy divorce here which is hammering the currency. The problem like you say is we import more than we should, I don't think many poor people can afford a 10-15% rise in food costs. This will hurt discretionary spending and possibly send us into recession.

I manage a portfolio of stocks worth around £100,000, half of which are in US dollars. I benefit from the £ weakening, although I need to keep some UK stocks if the £ strengthens after brexit.
The poor are going to be absolutely hammered by Brexit. The biggest losers will be people in the coastal towns and depressed communities who voted for it. However, there will also be large unemployment surges in formerly relatively prosperous areas, such as the areas surrounding car and aviation plants and some people in London and the SE who relied on key UK industries. A lot of people who voted for Brexit are going to lose their livelihoods. This is not something by the way that I feel happy about.

I am uninterested in your stock positions.
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Jammy Duel
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#40
(Original post by maachu_pichuu)
Mogg (Somerset Capital Management) is shorting the pound, so is his friend Crispin Odey (Odey Asset Management)
Tbh any rational person would have been shorting over the last few months knowing the hysteria that would come
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