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Why sterling may get another pounding from Brexit


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Old 23-12-2016, 07:33
TheEngineer
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The pound may have recovered from its post-Brexit lows, but it's set to face another round of Brexit heat, analysts said.

In the wake of the U.K.'s late June vote to exit the European Union (EU), the pound tumbled to as low as $1.1450 in an October flash crash.

But the currency recovered from those 30-year lows in the wake of Donald Trump's surprise U.S. election win, reaching levels above $1.27 in early December. That was up from levels under $1.24 before the election results, potentially on expectations that the president-elect could pursue a "fast-track" trade deal with the U.K.

On Thursday at 3:23 p.m. HK/SIN, the pound was fetching $1.2361.

But analysts at Nomura said in a note Wednesday that even current levels might be overly optimistic, noting that it's very difficult to determine what the market is pricing in, especially when no one yet knows what type of agreement the U.K. government will secure with the EU. Markets are speculating on a "hard, soft, flexi and transitional Brexit," Nomura notes.

Among the issues which will determine whether the Brexit is hard, soft or in between will be whether the U.K. exits the EU's single market, whether free movement of people will be allowed and whether the U.K.'s financial players will retain "passporting rights" with the continent.
Can't even afford to drown your sorrows!

http://www.telegraph.co.uk/business/...stlier-brits2/

Champagne drinkers in Britain - the biggest export market for bubbly - face higher prices next year as the impact of the shock Brexit vote on the British pound takes its toll, champagne industry executives warned.

"The market in Britain is undergoing a period of adjustment. The brands have not yet factored in the effect of foreign exchange rates on their prices," said Charles-Armand de Belenet, marketing director for Pernod Ricard's Martell Mumm Perrier-Jouët champagne brand.

The June vote for Britain to quit the European Union led sterling to slump to its lowest level since 1985 against the U.S dollar and to fall against the euro, although it has since edged back up from those lows.
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Old 23-12-2016, 07:38
Maxatoria
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Adopt a Scottish accent and keep repeating

"We're doomed I tell ya, doomed"
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Old 23-12-2016, 07:49
TheEngineer
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Adopt a Scottish accent and keep repeating

"We're doomed I tell ya, doomed"
Thank you for that detailed analysis of the financial markets and well reasoned arguments as to why Nomura are wrong.

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Old 23-12-2016, 07:51
CSJB
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Oh noes, the champagne quaffing, bubble living sect might have to pay more for their favourite tipple
End brexit now !
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Old 23-12-2016, 07:54
Doctor_Wibble
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Sterling! Pounding! I see what they did there!!!
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Old 23-12-2016, 08:00
B-29
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Scrape, scrape, scrape , scrape, scrape,.............................
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Old 23-12-2016, 08:10
Maxatoria
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Thank you for that detailed analysis of the financial markets and well reasoned arguments as to why Nomura are wrong.

But its all we get every day so we might as well just sum it up in a 30 second bit of dads army and be done with it.
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Old 23-12-2016, 08:21
jmclaugh
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So the thread starts with the £ has largely recovered its post Brexit loss in value and finishes with the price of champagne will be going up due to the £s loss of value.

I don't know how I'd have got through the day without knowing this.
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Old 23-12-2016, 08:30
HR Guru
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Well this morning we are already almost as low as we were a few weeks ago at $1.22 vs $1.21.

Down against the Euro as well despite all problems with the Euro.

Petrol up across the board and inflation has started to filter through to consumer pricing.
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Old 23-12-2016, 08:30
TheEngineer
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So the thread starts with the £ has largely recovered its post Brexit loss in value and finishes with the price of champagne will be going up due to the £s loss of value.

I don't know how I'd have got through the day without knowing this.
Perhaps reading it a little more closely would have helped. The pound has recovered some of the losses.
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Old 23-12-2016, 08:33
jmclaugh
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Perhaps reading it a little more closely would have helped. The pound has recovered some of the losses.
Shush, I'm too busy stocking up on Bolly.
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Old 23-12-2016, 08:46
allaorta
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Presumably there'll only be horses and strawberries at Royal Ascot.

Could the OP let us know whether he has a thread for Christmas Day?

Oh yes, Nomura, wasn't there some monkey business there a few years ago; dodgy dealing?
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Old 23-12-2016, 08:51
ste1969
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Presumably there'll only be horses and strawberries at Royal Ascot.

Could the OP let us know whether he has a thread for Christmas Day?

Oh yes, Nomura, wasn't there some monkey business there a few years ago; dodgy dealing?
he will be too busy tossing himself off over channel 4's alternative christmas message
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Old 23-12-2016, 09:05
andykn
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Scrape, scrape, scrape , scrape, scrape,.............................
Oh we're nowhere near the bottom yet, still a long way down to go. You're going to be very, very busy with your "lalalalala not listening" messages over the next few months.
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Old 23-12-2016, 09:08
allaorta
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Oh we're nowhere near the bottom yet, still a long way down to go. You're going to be very, very busy with your "lalalalala not listening" messages over the next few months.

Lalalalalalalala
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Old 23-12-2016, 09:45
MargMck
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So the thread starts with the £ has largely recovered its post Brexit loss in value and finishes with the price of champagne will be going up due to the £s loss of value.

I don't know how I'd have got through the day without knowing this.
It's like the world's worst advent calendar from the pound shop, isn't it? Make that 99p Shop.
Every day you come to DS and open up The Engineer's latest window on their strange world to find some shrivelled or melted down offering which looks like it really belongs in the cat's litter tray.

Mind you, something has been missing recently (risks putting the kibosh on things).... where are NetNut's daily questions such as "Will Brexit destroy the manned mission to Mars project?"

Anyway, no one need worry about champagne. Buy British fizz - we now have international award winners - this has been really peeing off the French - from grapes grown on southern chalk hills which mirror the Champagne district soil.
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Old 23-12-2016, 09:45
Rastus Pieface
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so, sterling rises and falls on the markets, and 'experts' predict it could fall again. shock horror. The inhumanity of it all.

in other news, bears do crap in the woods, old hippy guy hates tories, banglaroad still has his farage fixation, and trevgo has the ability to find a cloud in every silver lining.

merry xmas.
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Old 23-12-2016, 09:54
Amaretto2
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Oh well. I guess I'll just have to have SPAM for Christmas Dinner and rely on the latest 150 anti-Brexit threads for entertainment instead of my usual pinot noir.
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Old 23-12-2016, 10:02
Thiswillbefun
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so, sterling rises and falls on the markets, and 'experts' predict it could fall again. shock horror. The inhumanity of it all.

in other news, bears do crap in the woods, old hippy guy hates tories, banglaroad still has his farage fixation, and trevgo has the ability to find a cloud in every silver lining.

merry xmas.
Sterling doesn't "rise and fall", it reacts to the economic conditions.

If there is uncertainty as the the future of the economy, sterling will react accordingly.
If the UK decides to slash it's own economy, there will be a flight from sterling, leading to a fall in the £.

When the deal is agreed, the shock will lead to another realigning of sterling. Most likely another 10% or more fall. Again leading to higher import costs, meaning higher price inflation, and costs being passed to the customer.

Only the hope that Donald Trump will provide special deals to the UK is preventing sterling from being at 30 year lows.

It seems some people manage to see silver linings mushroom clouds.
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Old 23-12-2016, 10:54
allaorta
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It's like the world's worst advent calendar from the pound shop, isn't it? Make that 99p Shop.
Every day you come to DS and open up The Engineer's latest window on their strange world to find some shrivelled or melted down offering which looks like it really belongs in the cat's litter tray.

Mind you, something has been missing recently (risks putting the kibosh on things).... where are NetNut's daily questions such as "Will Brexit destroy the manned mission to Mars project?"

Anyway, no one need worry about champagne. Buy British fizz - we now have international award winners - this has been really peeing off the French - from grapes grown on southern chalk hills which mirror the Champagne district soil.
Don't forget that one of those two German retailers, Lidl or Aldi, have just won an award for the best champagne at £10 a bottle. Just so long as you're not too proud, would you give a shyte if it went up by 20%?
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Old 23-12-2016, 10:57
allaorta
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so, sterling rises and falls on the markets, and 'experts' predict it could fall again. shock horror. The inhumanity of it all.

in other news, bears do crap in the woods, old hippy guy hates tories, banglaroad still has his farage fixation, and trevgo has the ability to find a cloud in every silver lining.

merry xmas.
Funny of the week.
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Old 23-12-2016, 11:08
Mark_Jones9
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So we can look forward to a lower value GBP aiding UK exports and economic growth, hopefully offsetting some of the effect of economic uncertainty caused by the impending Brexit. Exports already jumped up £2.1 billion in October and the trade deficit is falling. Unemployment is falling, the number of job vacancies increasing, average pay increasing faster than inflation. Its a far cry from the Treasury's predictions of the immediate aftermath of a vote for Brexit.
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Old 23-12-2016, 11:09
Thor_Noggsson
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so, sterling rises and falls on the markets, and 'experts' predict it could fall again. shock horror. The inhumanity of it all.

in other news, bears do crap in the woods, old hippy guy hates tories, banglaroad still has his farage fixation, and trevgo has the ability to find a cloud in every silver lining.

merry xmas.
I think you'll find that it's a big black raincloud.
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Old 23-12-2016, 11:32
nomad2king
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The value of the Pound dropped mainly because of all the Remainers saying it would drop if there was a vote to leave. Where the Markets can be convinced that in a certain situation that everybody else will act in the same way, ie buy or sell, then they are forced to do the same thing. Otherwise they would be left behind and lose out financially. If they delay selling/buying then end up getting/receiving less. People then selling forces the price down, so it ends up being a self-fulfilling prophecy and nothing to do with any possible genuine reasons.
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Old 23-12-2016, 11:49
andykn
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The value of the Pound dropped mainly because of all the Remainers saying it would drop if there was a vote to leave.
Keep showing us all why referenda are a bad idea.
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