Sterling plunges over 6% against USD overnight in Asia

HornetSaver

michaels wrote: »

Everyone is talking about Brexit but it seems to me the end of austerity / fiscal loosening that the govt has preached during the conference is more likely to be behind gbp weakness.

Weren't the weeks immediately to either side of 23rd June filled with talk of how much deeper Gideon would need to cut in the event of/as a result of the Brexit vote?

That has proven redundant because he is no longer chancellor and his successor is not following that policy. But the pound was plummetting against that backdrop. Now apparently it's falling further because his forecasts of the need for greater cuts was proven to be incorrect, as Brexit voters (to their credit) had said all along?

Doesn't quite add up...

Thrugelmir

HornetSaver wrote: »

Now apparently it's falling further because his forecasts of the need for greater cuts was proven to be incorrect, as Brexit voters (to their credit) had said all along?

Doesn't quite add up...

The UK will be borrowing more. The black hole in the public finances has never actually been addressed. As GO never had an opportunity to make the necessary fiscal adjustments.

Seems as if much of the sharp fall is down in part to a reduced level of intra trading between investment banks (as they continue to scale back activity). Computer algorithms sparked downward selling orders and there was little buying activity to offset the wave. Regulators will have to look into the cause as could easily happen again.

DiggerUK

Kohoutek wrote: »

Are you aware that on the morning of the referendum result there was a sudden change in 'fx rates for sterling'?

I am also aware that fx rates for sterling have, and haven't, changed quite suddenly on many occasions.
If everybody had spoilt their ballot papers as I did, fx rates would still have changed.

All this excitement is reminiscent of those who got animated about miasmas'.....the equivalent of farting in a hurricane..._

Thrugelmir

DiggerUK wrote: »

All this excitement is reminiscent of those who got animated about miasmas'.....the equivalent of farting in a hurricane..._

Remember George Soros? Somebody out there maybe again playing poker.

His words.

Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected.

Kohoutek

DiggerUK wrote: »

I am also aware that fx rates for sterling have, and haven't, changed quite suddenly on many occasions.
If everybody had spoilt their ballot papers as I did, fx rates would still have changed.

And what is that counterfactual based on, exactly?

DiggerUK

Thrugelmir wrote: »

Remember George Soros? Somebody out there maybe again playing poker..

Once again.....so what?
Not all the gamblers are winners, and the referendum vote is an irrelevance to this 'flash crash' Whatever happens with fx, or the economy, was already baked in.

It might dawn on the aroused here, that the whole issue is now a masquerade for fools to just b!tch at each other..._

Thrugelmir

DiggerUK wrote: »

Once again.....so what?

Rabbits in headlights springs to mind. Only time will tell. Little point in getting carried away...........

DiggerUK

Brexit/Bremain my @r$e...even Dominic Frisby can't see the wood for the trees. http://moneyweek.com/how-low-can-the-pound-go/#comments

I completely overlooked the acceptance of the Chineses Renminbi (CR) into the IMF basket for SDR. http://www.imf.org/external/np/exr/facts/sdr.htm

As there would have been a buying spree for CR, and therefore a lower demand for GBP/sterling, the pound would be slapped on the funny bone.

As I have already said, nothing to do with a cross in a ballot box, laws of supply and demand..._

Thrugelmir

DiggerUK wrote: »

As there would have been a buying spree for CR, and therefore a lower demand for GBP/sterling, the pound would be slapped on the funny bone.

As I have already said, nothing to do with a cross in a ballot box, laws of supply and demand..._

Intra bank currency trading is around 60 times higher than actual demand for hard currency. Pure speculation.

DiggerUK

Thrugelmir wrote: »

Intra bank currency trading is around 60 times higher than actual demand for hard currency. Pure speculation.

Not at all, if you do the sums then it near enough matches up to the change in SDR allocation.

Renminbi did ok, punch in 1 month chart..._ http://www.bloomberg.com/quote/USDCNY:CUR