Protecting our money with brexit currency drops

AnotherJoe

RG2015 wrote: »

Wouldn’t the continued uncertainties surrounding Brexit reduce the value of investments?

No. Let's take one I hold, Apple shares. Why would you think the value of Apple shares (nominated in US dollars) would reduce in value (in U.K. Pounds ) due to "the uncertainties surrounding Brexit" ???

Rinse and repeat for every investment other than a U.K. company that only does business in the U.K. Now, if you've only invinvested in uk companies that do business only in the U.K. - well you should be locked up.

masonic

Getting back on topic, people in another thread were recently discussing the need to hedge their exposure to other currencies in case the pound strengthens and recovers some of its previous fall. Now we are discussing the risk it could fall further. Which is more likely? That's anyone's guess!

Welcome to the world of currency speculation. It's a mug's game.

eskbanker

Economic wrote: »

Depreciation of sterling also affects the price of imported goods, and imports are about 30% of UK GDP.

RG2015 wrote: »

I agree with this in regard to currency speculation however, any drop in the value of Sterling would fuel inflation, at least in the short term. This in turn would erode the value of savings.

I do accept some correlation between devaluation and inflation but the post-referendum sterling drop of 10-20% was only mirrored by inflation increasing by about 2%, so remain unconvinced that OP was considering this from the perspective of hedging against consequential inflation and was apparently more concerned about headline exchange rates.

masonic

eskbanker wrote: »

I do accept some correlation between devaluation and inflation but the post-referendum sterling drop of 10-20% was only mirrored by inflation increasing by about 2%...

...and that drop was part of a long-term trend, albeit the shock of Brexit may have been the trigger to release more of the pressure that had been building over the years. I don't think a bad deal is going to shock anyone. In fact, any other outcome could be far more shocking and lead to quite a different outcome.

System

Kevinweav wrote: »

We're really worried that our savings might crash in value with the pound

Why? If you had £100 in before Brexit even if the pound crashed 50% you'd still have £100 in the bank.

System

masonic wrote: »

...and that drop was part of a long-term trend

And also within the range the IMF said Sterling was over-valued by in a report they released at the beginning of June 2016 three weeks prior to the Referendum

dividendhero

Tarambor wrote: »

Why? If you had £100 in before Brexit even if the pound crashed 50% you'd still have £100 in the bank.

Echoes of Harold Wilsons famous "The pound in your pocket.." in 1967.

I know it's taking it to extremes, but would you say the same in Zimbabwe or Venezuala?

poppy10_2

Tarambor wrote: »

Why? If you had £100 in before Brexit even if the pound crashed 50% you'd still have £100 in the bank.

But that £100 wouldn't be buy as much as £100 could now

AnotherJoe

poppy10 wrote: »

But that £100 wouldn't be buy as much as £100 could now

But it might well buy more than £100 turned into Euros or Dollars and then back again into Pounds. Those transactions would likely lose more than losses through inflation.

System

It looks like the OP has left it a little too late (a case of closing the stable door after the horse has bolted).
"Sterling falls to three-week low on Brexit uncertainty"
https://www.ft.com/content/812bcdd0-d766-11e8-ab8e-6be0dcf18713