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Old 13-12-2016, 16:27
andykn
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But we've also had the sovereign debt crisis, particularly in the Eurozone during the post 2008 period and still the pound was averaging the same value suggesting, to me at least, that traders felt the average £/€ rate of 1.16 was about right. Currencies fluctuate constantly and the movements caused by the Brexit vote have been extreme in the short term but overall it's trading about right.



It had been falling since mid last year, it had a brief 6-week upward movement just before the referendum when the markets predicted stability but that was corrected very quickly (and extremely). If you look at the overall trend it's been downward long before the referendum.
Not that long before the referendum, until just after Cameron had got in on his promise of a referendum and the markets realised the referendum was a real possibility the pound had been on a long term recovery from 2008.

The decline from 1.40 is all referendum.
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Old 13-12-2016, 16:29
andykn
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The simple answer to the OP's question is that is what the media does these days.
The media has always been all over increases in inflation.
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Old 13-12-2016, 16:45
Rooks
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Not that long before the referendum, until just after Cameron had got in on his promise of a referendum and the markets realised the referendum was a real possibility the pound had been on a long term recovery from 2008.

The decline from 1.40 is all referendum.
Again, not true. The pound had been stable against the Euro, there was no sense of a recovery to it highs of 2005/2006. It had it's peaks and troughs but it was averaging around the 1.16 mark. The referendum was called in mid Feb 2016 when the Euro was trading around the 1.3 mark, significantly down from it's highs of the previous summer. It doesn't change the fact that where it's trading today isn't unusual, it's pretty much where it's been on average for the last 8 years and I don't recall many cries of doom about it during that period.
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Old 13-12-2016, 16:53
Sluger
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They can keep screaming "We're Doomed!" all they like. Each time less and less people believe them. Stands by for the cry of "We haven't left Europe yet". That one is getting a bit dull too.
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Old 13-12-2016, 16:54
andykn
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Again, not true. The pound had been stable against the Euro, there was no sense of a recovery to it highs of 2005/2006. It had it's peaks and troughs but it was averaging around the 1.16 mark. The referendum was called in mid Feb 2016 when the Euro was trading around the 1.3 mark, significantly down from it's highs of the previous summer. It doesn't change the fact that where it's trading today isn't unusual, it's pretty much where it's been on average for the last 8 years and I don't recall many cries of doom about it during that period.
You can quite clearly see here:

http://www.xe.com/currencycharts/?fr...o=EUR&view=10Y

that the long term trend from the crash starting in 2007 up until the referendum became likely in mid 2016 was upwards.
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Old 13-12-2016, 16:55
andykn
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They can keep screaming "We're Doomed!" all they like. Each time less and less people believe them. Stands by for the cry of "We haven't left Europe yet". That one is getting a bit dull too.
How did you expect high inflation to start? 10% overnight? In May it was 0.3% now it's 1.2.
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Old 13-12-2016, 16:58
Sluger
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How did you expect high inflation to start? 10% overnight? In May it was 0.3% now it's 1.2.
The government target is 2% which we haven't hit in donkey's years.
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Old 13-12-2016, 17:08
Rooks
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You can quite clearly see here:

http://www.xe.com/currencycharts/?fr...o=EUR&view=10Y

that the long term trend from the crash starting in 2007 up until the referendum became likely in mid 2016 was upwards.
It's quite amazing how two people can see something so different in one graph That graph shows that, just as I've said, the average between 2008 and 2014 is around 1.16 to the pound. It also shows it had a rather decent climb in 2014 but has been declining since mid 2015. Which is, in my opinion, quite normal behaviour for a currency. What part of that graph looks unusual to you? I guess I'm struggling to understand why people think the current exchange rate of 1.19 is newsworthy when it wasn't newsworthy in the previous times it's been at, or below that rate in the 8 previous years?
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Old 13-12-2016, 17:17
trevgo
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Just wait until the day A50 is invoked.
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Old 13-12-2016, 17:20
Sluger
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They can keep screaming "We're Doomed!" all they like. Each time less and less people believe them. Stands by for the cry of "We haven't left Europe yet". That one is getting a bit dull too.
Just wait until the day A50 is invoked.
It took 5 posts. You are slipping
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Old 13-12-2016, 17:21
trevgo
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It took 5 posts. You are slipping
Sneer all you like.

I will be proved right.
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Old 13-12-2016, 17:23
Aurora13
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How did you expect high inflation to start? 10% overnight? In May it was 0.3% now it's 1.2.
It's the modern world. If it doesn't happen immediately it's not happening. Well the world hasn't changed a sterling crisis is a sterling crisis. We know what happens in the years afterwards. The fact that the pound has fallen as it has against the dollar and the nonchalant way it has been dismissed is something that no doubt will be talked about in years to come. Why? In previous decades this would be front and centre of news. The fact that over 50% voted for it is probably the answer.
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Old 13-12-2016, 17:42
Mr Oleo Strut
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Not that long before the referendum, until just after Cameron had got in on his promise of a referendum and the markets realised the referendum was a real possibility the pound had been on a long term recovery from 2008.

The decline from 1.40 is all referendum.
Irrefutable. We have experienced a massive devaluation and there is worse to come.
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Old 13-12-2016, 17:52
andykn
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The government target is 2% which we haven't hit in donkey's years.
Not an answer to the question put, how do you expect high inflation to start?
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Old 13-12-2016, 17:55
andykn
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It's quite amazing how two people can see something so different in one graph That graph shows that, just as I've said, the average between 2008 and 2014 is around 1.16 to the pound. It also shows it had a rather decent climb in 2014 but has been declining since mid 2015. Which is, in my opinion, quite normal behaviour for a currency. What part of that graph looks unusual to you? I guess I'm struggling to understand why people think the current exchange rate of 1.19 is newsworthy when it wasn't newsworthy in the previous times it's been at, or below that rate in the 8 previous years?
Er, any trend would have an average.

Mid 2015 was when the referendum became likely. And yes, responding to events is normal for a currency, long term rise from 2008 to mid 2015 as the UK economy recovered then decline as shooting itself in the foot became more likely.

It's newsworthy because it's against the previous trend. It was newsworthy when it fell to 1.19 in 2008.
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Old 13-12-2016, 18:49
gallag
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Sneer all you like.

I will be proved right.
That would be nice for you, and like a broken clock there is always a chance one of these times you will be right! Am rooting for ya kiddo!
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Old 13-12-2016, 20:13
TelevisionUser
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Just to be consistent and head of the predictable argument is actually do not want the pound to go much above the €1.20 rate, if people give it time a devalued pound will help diversify our economy and make it more manufacturing/export driven.
^ No, just more Leave denial. A mild devaluation is one thing but the pound crashing and losing 20% of its value is another thing. Businesses and consumers will then be hit hard by increased fuel prices which are priced in US dollars), necessary imported components, increased imported food costs and so on which all leads to inflation and erosion of wage power as well as hurting businesses.

Indeed, I know of a transport company where no one's going to get a pay rise in 2017 because of increased fuel costs resulting from the Brexit vote.

Just why does voting Leave = complete economic illiteracy and denial?
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Old 13-12-2016, 20:19
Mr Oleo Strut
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Nothing except parliament agreeing article 50 will be signed first quarter 2017, the markets price these things in in advance, Brexit was a shock and the market reacted as such, there will now be no more massive shifts over Brexit, the main factors to affect GBPEUR over the next year will all be European risks with many governmental elections etc.
You are either an optimistic genius or a fool. I am neither.
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