UK pound down....

[sumyunggai]

It would be much better to compare GBP to USD before UK joined EU and today.

That was 44 years ago, I dont think there is any useful comparison.

 

[jstar]

Once article 50 is invoked it must be completed in 2 years max ...i.e. March 2019. ​The longer it takes the more volatile will be the UK currency and other UK markets.

You're right about the basic premises of course. But if you look at Switzerland and Norway; they are still negotiating and tweaking the agreements...

 

[sumyunggai]

So the pound is down some more, to 16,100. It was briefly down to 15,300 however some people are blaming this on a data entry error.

 

[Smallworld]

......even after the whole speech from Teresa May.

I also don't understand why is it still falling. Are there any "hard" informations like companies leaving London, foreign businesses shutting down in UK? Or it this because of speculators and their "sensitive algorithms"?

"Possibly a keyword or newsflow-focused algorithm started the selling in the pound based on that article, and other algorithms may have seen the volume and momentum coming into the pound at what is normally a relatively low volume time," Mr Nicholson said.

http://www.bbc.com/news/business-37582150

 

[Davita]

......even after the whole speech from Teresa May.

I also don't understand why is it still falling. Are there any "hard" informations like companies leaving London, foreign businesses shutting down in UK? Or it this because of speculators and their "sensitive algorithms"?
http://www.bbc.com/news/business-37582150

Thanks for the link SW...I had a laugh when it mentions the 'fat finger'....incredible that some trader typo's his keyboard and inputs a wrong number and the economy of a country crashes...how I wish they would use the abacus instead...

 

[Anglian]

Thanks for the link SW...I had a laugh when it mentions the 'fat finger'....incredible that some trader typo's his keyboard and inputs a wrong number and the economy of a country crashes...how I wish they would use the abacus instead...

a Flash Crash, quite scary really someone with fat fingers can cause the pound to drop to $1.18 and nobody really can pin the source or why

 

[jstar]

Yeah, it is somewhat scary. But the correction took place fast; suppose you had an option...

Quite many analysts do expect a $1.10 rate and parity against the euro at the end of 2017. That would be huge.

 

[Smallworld]

@Davita You're welcome.

Have any of you guys/girls seen Monster Money movie? They also had 'computer's glitch' mentioned there. At the end it was however something quite different.

As for fat fingers --- I would guess it is normal for 'fat cats' to have 'fat fingers' hehehehe.

 

[Davita]

As for fat fingers --- I would guess it is normal for 'fat cats' to have 'fat fingers' hehehehe.

I know you are being satirical SW and very amusing but...
on a serious note there are millions of the UK previous working class, living overseas, who rely on their pensions which have dropped in value. In addition, those living in UK will see a dramatic inflation if the currency isn't re-balanced, vis a vis trade.

It's obvious that products manufactured in UK, and sold abroad, are benefiting but what about imported goods...especially food...can UK feed itself?

IMO.....The very seniors who, I understand, were the stalwart voters for a sovereign Britain, and exit EU, are the ones who will ultimately suffer when the UK economy, and the value of the currency, may totally collapse.

 

[waarmstrong]

.... IMO.....The very seniors who, I understand, were the stalwart voters for a sovereign Britain, and exit EU, are the ones who will ultimately suffer when the UK economy, and the value of the currency, may totally collapse.

They that sow the wind, shall reap the whirlwind.

 

[Jaime C]

The UK decided to keep it's own currency, as well as vote to exit. All damage was certainly self inflicted.

If you live in Indonesia, it's likely your expenses are lower than the UK, anyway. Lots of other currencies have taken a bath over the last 10 years. Just look at the Australian and Canadian dollars as examples.

 

[Smallworld]

I know you are being satirical SW and very amusing but...
on a serious note there are millions of the UK previous working class, living overseas, who rely on their pensions which have dropped in value. In addition, those living in UK will see a dramatic inflation if the currency isn't re-balanced, vis a vis trade.
....

Working class from UK who lives outside UK well...they choose their destination countries (for retirement) with one major factor having in their minds - being cheap and affordable to live - so their small (in terms if they would decide to stay and live in UK) pension or any other source of income would give them more than what they would have if they stay in UK. To put it simply they are looking for places/countries where living costs are not as high as in UK (rent,house price,food, service is cheaper than in UK). Of course they will be affected if pound value will go down - but on the other side even if they would stay in UK or decide to go back they would struggle even more. So what choice when the 'currency is falling' would they have?

 

[Smallworld]

Another week and the slide continues...

1 British Pound equals
15995.62 Indonesian Rupiah

 

[jstar]

They was a bit of a dive this morning but they are recovering somewhat.

USD/IDR rather stable.

 

[Smallworld]

Nope no recovery yet....

1 British Pound equals
15875.76 Indonesian Rupiah

Here is a side effect:

http://www.dailymail.co.uk/news/art...emanded-10-cent-price-rise-falling-pound.html

 

[jstar]

One can't help wondering what would have happened if they would have gone with the Euro at the time....(and they could have introduced the Pound again at a Brexit).

Rather recently there was a similar situation in Mexico btw; by measures of the Bank of Mexico, the value of the peso changed so much that for suppliers who had deals with bigger chains like WalMart* in the local currency (peso), it became unfavorable to export to that country. So some have just stopped sales and deliveries altogether.

 

[Davita]

Indonesia also suffers from a risk issue with its currency....seems like the US$ is still almighty.
from Jakarta Globe...
The prospect of receiving payment in rupiah is among the main challenges faced by foreign investors who want to put their money into Indonesia's infrastructure sector and prevents the country from tapping into a source that could make it grow at a faster pace, consulting firm PricewaterhouseCoopers (PwC) reported on Tuesday (11/10).
While Indonesia is making progress in its infrastructure sector by increasing spending, easing the negative investment list which identifies the sectors open to foreign investment and cutting off red tapes, it has not convinced enough foreign investors to sink their teeth into it.
PwC said in the first semester foreign direct investment in infrastructure decreased to $1.97 billion from $6.02 billion in the corresponding period last year.
PwC reported that the government is not always cooperative in policy-making, as it always defers to the central bank's regulation that only allows payment in rupiah for all transactions in the country.
"Foreign investors want to put their money into new projects, especially building new airports, but unfortunately all payment has to be made in rupiah. This has discouraged them from investing as it heavily increases the risks of the investment," PwC Indonesia infrastructure adviser Julian Smith said.
Julian said there are plenty of obstacles for foreign investors who want to invest in the private sector — mostly uncertain legal framework, obscure project development, risk-averse officials, sudden government policy changes and limited budget for agencies.
On the bright side, the government has shown a newly found commitment to push through with major infrastructure projects.
President Joko Widodo recently inaugurated the Ranai Airport in Natuna, Riau Islands — the first in the border area. In early June, the government also completed a gas-fired power plant in Gorontalo, North Sulawesi, as part of a push to add 35,000 megawatts to the national power grid.
Government spending for infrastructure rose to Rp 317.1 trillion ($ 24 billion) this year from Rp 290.3 trillion in 2015.
The government also revised its negative investment list in May, allowing foreigners to fully own a business or hold a significant equity stake in telecommunication, energy and toll road companies.
To attract more foreign investment, PwC advises the government to speed up land acquisition process, improve coordination between government institutions and invest in finding more skilled workers for its infrastructure projects.

 

[Smallworld]

.....
"Foreign investors want to put their money into new projects, especially building new airports, but unfortunately all payment has to be made in rupiah. This has discouraged them from investing as it heavily increases the risks of the investment," PwC Indonesia infrastructure adviser Julian Smith said.

Those are the biggest breaks for investment here in Indonesia.

 

[Smallworld]

After seeing some articles on the internet saying saying German automobile companies are considering moving their factories elsewhere to EU I came upon this article...

....Sterling’s troubles are a reminder that foreign investors have an indirect say – and interest – in how a country is managed. .....

https://www.chathamhouse.org/expert/comment/fall-pound-shows-sovereignty-s-limits

 

[tokektokek]

Still no recovery yet, and doesn't look like its going to be better anytime soon. 1 British pound is still getting less than 16,000 which is not good.

The Brexit referendum crippled the British currency.

However, if you look at the British pound to Indonesian Rupiah for the last 10 years, the current rate is not too bad:

http://www.xe.com/currencycharts/?from=GBP&to=IDR&view=10Y

The British pound will recover and regain its strength, its just a question of when not if. It still remains to be seen if the UK will actually leave the EU or not - I am not convinced it will, despite what the current Prime Minister keeps saying.