Sterling drops on Carney remaining

Londonlisa12

Last week on the rumour Carney would be remaining at the head of the BoE sterling took a big dip.
Today when it's been confirmed its taken another drop despite rising on other news earlier today.

All he has done in his years at the BoE is to talk sterling down.

Is this in the best interest of the country he is supposedly working for?

Voyager2002

Yes: sterling is terribly overvalued and he is doing his best to make our industries competitive.

Uxb

I think your observation is lost on the poster
By talking sterling down this means our exports become more competitive compared to others - so we do better -though any imports necessary to achieve those exports become more expensive.

When I worked in UK exporting industry and we exported near 100% it was quite simple. Sterling went up, our prices as translated into the foreign currency became uncompetitive, our orders went down and our profitability and general company health reduced.
Conversely when sterling went down the opposite occurred. When sterling was in the ERM and interest rates were raised to the roof and the £ soaring we were in a bad way - the week after the £ dropped out of the ERM and "plunged" it was bedlam with orders and inquiries/update to them flooding in.

Londonlisa12

I understand it's good for exports.

To say it's terribly overvalued goes to show you know nothing about fx trading.

If it's value was eg £/$1.20 it would already be there not at £/$1.30 it is presently.

And if you think you know it's guaranteed to go $1.20 you would not be hanging around on a forum on a money saving website and on a beach in Bermuda.

mustiuc

Lisa's concerns are about her personal finances and life. I bet is that. So it might be good for business but it might affect low/mid class. They will always find an excuse to raise the prices due to "inflation/currency/etc".
I've been to france/belgium/switzerland last month and I was shocked to see their prices in supermarkets for food/goods. Before, i was moaning about prices here, moaning about sterling, moaning about rents, etc. After that trip and speaking about with some friends living in eu.... i dont know what to say/think.
Maybe was better here because sterling was "teribly overvalued" but this helped people to have a decent standard of living.
I really want to see pound dropped as low it can go to see for whom is good this thing. For people or for businesses.

PS. A friend of mine changed two weeks ago in city centre £200 for €198. And yesterday the exchange rate was 1.08. Not too bad

Londonlisa12

Mustiuc,yes personal finance.

It just goes to show Carney is in the hands of big business and cares nothing about the working/middle class of this country.

It's strange how the earler poster totally forgot to mention the increase in prices of all imports.

My main point was how the market immediately reacts to devaluing sterling on the rumour and then knowledge of Carney staying.

Would another govner of the BoE employ a different policy ?It seems to be the case the way the market reacts.

And let's be fair it's all he has ever done is talk sterling down even long before Brexit.

agrinnall

mustiuc wrote: »

PS. A friend of mine changed two weeks ago in city centre £200 for €198. And yesterday the exchange rate was 1.08. Not too bad

I won't comment on the OP as it's on the wrong board, should be on Debate House Prices & the Economy, but on the above point why would your friend change cash at a terrible rate when even the worst debit card ATM withdrawal would have seen him/her with more money.

mustiuc

I have no idea. He just told me he's feeling better having cash with him in case of emergency.
While I was in eu last month, I used revolut and aqua advance for payments/cash without fees. Everyone is doing what they think is better for themselves.
I was surprised to see i can use cards from parking on the street to using the toilet, roaming without fees and many many other things. I will miss some of them after 29 march.

agrinnall

mustiuc wrote: »

I have no idea. He just told me he's feeling better having cash with him in case of emergency.

And I would normally take some sterling with me when I travel abroad, but except in extreme emergency I wouldn't change it for the local currency, I'd use a card to withdraw from an ATM and get a much better rate.

Filo25

Sterling is largely a Brexit trade at present, I think the ebbs and flows of optimism around Brexit had a lot more to do with any currency moves than Carney staying

Anthorn

Londonlisa12 wrote: »

Last week on the rumour Carney would be remaining at the head of the BoE sterling took a big dip.
Today when it's been confirmed its taken another drop despite rising on other news earlier today.

All he has done in his years at the BoE is to talk sterling down.

Is this in the best interest of the country he is supposedly working for?

The opening post I quoted above is not qualified. So exactly where does that information come from?

In September last year I got €1.17 per £. I just bought some Euros today and I got €1.12. Ok it's a dip on a year ago but not what I would call a "big dip".