FYI: Pound hits three-year low against euro

nkomp18

http://www.bbc.co.uk/news/live/business-37061554

It's not just against the dollar that sterling is struggling. The pound is trading at €1.152 - the lowest level it's been against the euro since 2013, according to Hargreaves Lansdown analyst Chris Saint.

It means sterling is heading for a lower level than it reached in the weeks immediately following the Brexit vote, when the pound finished at €1.165 on 6 July amid political uncertainty and expectations of an interest rate cut (which, as it turned out, came at the beginning of August instead).

Eric_the_half_a_bee

Given our chronic trade deficit and the complete absence of other inflationary pressures in our economy, a weak pound may well be a good thing for us.

AnotherJoe

nkomp18 wrote: »

http://www.bbc.co.uk/news/live/business-37061554

It's not just against the dollar that sterling is struggling. The pound is trading at €1.152 - the lowest level it's been against the euro since 2013, according to Hargreaves Lansdown analyst Chris Saint.

It means sterling is heading for a lower level than it reached in the weeks immediately following the Brexit vote, when the pound finished at €1.165 on 6 July amid political uncertainty and expectations of an interest rate cut (which, as it turned out, came at the beginning of August instead).

On what basis? That a movement in one direction means it will for sure continue in that direction? If you believe that, have you extended your mortgage in order to buy dollars big?

Anyway, thats good news for exporters, people running UK tourism (to locals and foreigners I see tourism to London is up), property prices in London (if you are selling to foreigners), or negotiating UK trade deals since it negates any tariffs anyone may think of imposing on the UK and also mean the UK has no need to add trade barriers for imports.

mwpt

AnotherJoe wrote: »

Anyway, thats good news for exporters, people running UK tourism (to locals and foreigners I see tourism to London is up), property prices in London (if you are selling to foreigners), or negotiating UK trade deals since it negates any tariffs anyone may think of imposing on the UK and also mean the UK has no need to add trade barriers for imports.

Would you be able to answer a straight forward question, with honesty?

Would you regard the Pound increasing in value vs other currencies as an equally good thing?

CLAPTON

mwpt wrote: »

Would you be able to answer a straight forward question, with honesty?

Would you regard the Pound increasing in value vs other currencies as an equally good thing?

in general, the relative value of the pound is a consequence of many other facts.
a decreasing value may or may not be a good thing
and an increasing value may or may not be a good thing

so e.g. suppose the economies of USA and China collapse: then it is likely that the pound will strenghten against both currencies but only an idiot would say that it was a 'good' thing per se.

AnotherJoe

mwpt wrote: »

Would you be able to answer a straight forward question, with honesty?

Would you regard the Pound increasing in value vs other currencies as an equally good thing?

Of course. And my honest answer is, it depends when. At this moment, no, a low Pound is what is needed.

And in general, I'd say the Pound "should be" whatever it should be according to our economic position. Its probably too low at the moment just because the markets tend to overcook things on way or another, witness the massive fall in UK shares immediately after Brexit followed by an equally massive rise after.

At some point there will no doubt be some rumours about Brexit which will be regarded as "good news" and you'll probably see it shoot up,and then when there is some "bad news" about Brexit it will shoot down again.

What I dont see it as, is a macho thing to get all concerned about, but fortuitously (or not) , at the moment a low Pound is what the doctor ordered. I'll see a strong Pound as a good thing if it means we survived Brexit and the Leavers were right about what that would do for the economy in the long term. Maybe thats a ten year away thing.

Thrugelmir

Eric_the_half_a_bee wrote: »

Given our chronic trade deficit and the complete absence of other inflationary pressures in our economy, a weak pound may well be a good thing for us.

Depends which type of inflation you are referring too. There's domestic i.e, pay inflation or external i.e. imported price inflation. BOE action suggests that they see imported inflation on the horizon. The unavoidable squeeze continues.

posh*spice

Buy British guys! Lots of lovely British beers and spirits - lovely London Gin - lovely Fullers beers :beer:

fatbeetle

Looking good to me! The $Au is now trading at 59.5p

Since I've lived in Aus it's been as low as 32p and as high as 68p.

mwpt

So basically, in most of your opinions, whatever happens with the Pound is probably the right thing and nothing to be concerned about. It is an interesting way to view it.

I wonder what remain voters take on this is. From my own perspective, I know I am not overly concerned with it at the moment because most of my wealth is in assets that should increase in GBP value as GBP falls, so I should be about net neutral. People mostly in cash won't be as fortunate.

The low paid workers are probably the ones who will be hit hardest, having the least assets and most exposed to inflation.

Eric_the_half_a_bee

mwpt wrote: »

The low paid workers are probably the ones who will be hit hardest, having the least assets and most exposed to inflation.

Inflation is 0.6%.