Doing anything to protect savings during Brexit?

masonic

Albermarle said:

eskbanker said:

steampowered said:

Brexit has already seen the pound drop dramatically against the dollar.

Except it hasn't - while it was in $1.40-1.50 territory back in H1 2016 ahead of the vote, its current $1.35 level is its highest for over 2.5 years....

Interesting,  as against the Euro the Pound is still around 25% down compared to its pre referendum value, and at just over €1.10 it is at the lower end of the range it has bobbed around for the last three years. Similar for Pound/Yen.

What we can conclude from that is that both USD and GBP have fallen in value relative to some other currencies. They haven't both fallen due to Brexit, so there could be an alternative explanation to them both having fallen that takes into account the longer term trends. Speculating on the reasons for exchange rate fluctuations is perhaps even more pointless than trying to predict them.

[Deleted User]

masonic said:

Albermarle said:

eskbanker said:

steampowered said:

Brexit has already seen the pound drop dramatically against the dollar.

Except it hasn't - while it was in $1.40-1.50 territory back in H1 2016 ahead of the vote, its current $1.35 level is its highest for over 2.5 years....

Interesting,  as against the Euro the Pound is still around 25% down compared to its pre referendum value, and at just over €1.10 it is at the lower end of the range it has bobbed around for the last three years. Similar for Pound/Yen.

 Speculating on the reasons for exchange rate fluctuations is perhaps even more pointless than trying to predict them.

No speculation required, masonic: hour by hour, day by day, year by year, £ fluctuates on post-Brexit expectations: the less the UK is expected to align to the European single market, the less £ is worth. 
In a world of uncertainty, you can take that to the bank. 

eskbanker

ZingPowZing said:

masonic said:

Albermarle said:

eskbanker said:

steampowered said:

Brexit has already seen the pound drop dramatically against the dollar.

Except it hasn't - while it was in $1.40-1.50 territory back in H1 2016 ahead of the vote, its current $1.35 level is its highest for over 2.5 years....

Interesting,  as against the Euro the Pound is still around 25% down compared to its pre referendum value, and at just over €1.10 it is at the lower end of the range it has bobbed around for the last three years. Similar for Pound/Yen.

 Speculating on the reasons for exchange rate fluctuations is perhaps even more pointless than trying to predict them.

No speculation required, masonic: hour by hour, day by day, year by year, £ fluctuates on post-Brexit expectations: the less the UK is expected to align to the European single market, the less £ is worth. 
In a world of uncertainty, you can take that to the bank. 

Thereby proving masonic's point nicely - "no speculation required", so here's some speculation!  Sterling obviously fluctuates as does every other currency (the vast majority of which are unaffected by Brexit but are affected by virus-related uncertainty and many other factors), but what support do you offer for your assertion that you know the reason?  Sterling to euro is still in the same €1.15 +/- 5% territory in which it's spent the post-referendum 4.5 years....

masonic

ZingPowZing said:

masonic said:

Albermarle said:

eskbanker said:

steampowered said:

Brexit has already seen the pound drop dramatically against the dollar.

Except it hasn't - while it was in $1.40-1.50 territory back in H1 2016 ahead of the vote, its current $1.35 level is its highest for over 2.5 years....

Interesting,  as against the Euro the Pound is still around 25% down compared to its pre referendum value, and at just over €1.10 it is at the lower end of the range it has bobbed around for the last three years. Similar for Pound/Yen.

 Speculating on the reasons for exchange rate fluctuations is perhaps even more pointless than trying to predict them.

No speculation required, masonic: hour by hour, day by day, year by year, £ fluctuates on post-Brexit expectations: the less the UK is expected to align to the European single market, the less £ is worth. 
In a world of uncertainty, you can take that to the bank. 

It is impossible to say that the fluctuation is because of a specific thing. Anyone who claims to know why a currency has risen or fallen is either lying or deluding themselves - to know this is to know the mind of every participant trading currencies. There is more going on in the world than Brexit. The pound has been falling against other currencies since the 1970s.

[Deleted User]

$1.34.2 currently
Probability of a deal is still high. If tomorrow signals a greater probability of no deal, £ falls. That's not speculation, it's repetition of a trading pattern that has governed sterling for five years. The clearest example being 24/06/2016 when, on the result of the referendum, £ suffered the biggest one day fall of any major currency since fixed rates were abandoned. It's not speculation, it's entirely logical: the single market offers synergies that make its members richer than those stuck outside; that is the reason the UK begged to join the EEC in the first place.

masonic

ZingPowZing said:

$1.34.2 currently
Probability of a deal is still high. If tomorrow signals a greater probability of no deal, £ falls. That's not speculation, it's repetition of a trading pattern that has governed sterling for five years.

It is speculation. Don't you think a mutant Covid sweeping across the country and increased lockdown restrictions will have any effect on the value of the pound? Or concern about the amount of money that will need to be printed to compensate businesses affected by the new trading restrictions and bans on international travel, etc etc. Speculation can be logical, but it is still speculation. Currency movements cannot be predicted or explained by logic.

ZingPowZing said:

The clearest example being 24/06/2016 when, on the result of the referendum, £ suffered the biggest one day fall of any major currency since fixed rates were abandoned. It's not speculation, it's entirely logical: the single market offers synergies that make its members richer than those stuck outside; that is the reason the UK begged to join the EEC in the first place.

Pound Dollar Exchange Rate (GBP USD) - Historical Chart

The falls that happened immediately after the Brexit vote are hardly significant in the context of a 50 year chart. These movements were much less significant than around the time of the credit crunch or several other seismic shifts. We can say that on that date there was a significant fall, which was largely reversed once the news was digested. What cannot be said is that there was not some other underlying weakness in Sterling that underpinned that fall, or that subsequent small fluctuations in the exchange rate are caused by specific expectations for Brexit.

[Deleted User]

Sure, sterling has been sinking for a hundred years but for the last five years, Brexit has weighed on £ more than anything else and shall continue to be the overwhelming concern. Which is not to say that other currencies are dominated by Brexit. But the way Brexit news affects the value of sterling is always consistent: the more Brexity it is, the worse for our currency.

masonic

ZingPowZing said:

Sure, sterling has been sinking for a hundred years but for the last five years, Brexit has weighed on £ more than anything else and shall continue to be the overwhelming concern. Which is not to say that other currencies are dominated by Brexit. But the way Brexit news affects the value of sterling is always consistent: the more Brexity it is, the worse for our currency.

Where is your evidence that Brexit has weighed on the £ more than anything else? I'm not saying you are right or wrong, but I don't believe you can substantiate your claim, so it is speculation. You don't need to look out to 50 years to see that there is more afoot than Brexit in GBP:USD currency fluctuations, here is a 5 year chart:

So, if as you say, Brexit has dominated these fluctuations to the exclusion of other events, what Brexit event sent the pound tumbling between April-May 2018 from pre-referendum levels to below those seen in the weeks following the referendum result? Theresa May published her Chequers plan in July 2018, which outlined a relatively soft Brexit, yet the pound continued to fall through July and into August, why was that? EU leaders rebutted TM's Chequers plan in September 2018, accusing her of trying to cherry-pick, and it was dismissed as illegal due to issues with the Irish border, yet the pound strengthened during this period. Shouldn't it have weakened?

The election campaign began in early October 2019, with BoJo campaigning for a harder Brexit, he wins the election with an 80 seat majority on 12 December and fills his cabinet with ardent hard Brexiteers and pledges to walk away from negotiations in July and go for a no deal Brexit if talks aren't making enough progress. The pound rises through this period and right out to the end of January, despite the risk of a no deal brexit increasing significantly.

What Brexit event happened in March 2020 that sent the pound tumbling to an all-time low? It must have been just a coincidence that this was when the severity of the Covid crisis became apparent.

Why is the current exchange rate about the highest it's been since May 2018? Are the currency speculators really more positive that a free trade agreement will be done than at any time in the past 2.5 years? How are you determining that the rises in the past couple of months are due to Brexit optimism vs Covid vaccine optimism?

eskbanker

This thread has more than a passing similarity to a Trump press conference!

Reporter: [fact]
Trump: [denial]
Reporter: [fact]
Trump: [whataboutery]
Reporter: [fact]
Trump: [rumour]
etc....

[Deleted User]

masonic said:

ZingPowZing said:

Sure, sterling has been sinking for a hundred years but for the last five years, Brexit has weighed on £ more than anything else and shall continue to be the overwhelming concern. Which is not to say that other currencies are dominated by Brexit. But the way Brexit news affects the value of sterling is always consistent: the more Brexity it is, the worse for our currency.

Where is your evidence that Brexit has weighed on the £ more than anything else?


Apart from the biggest one day fall of any major free floating currency ever on the day following the referendum, £ has fluctuated daily according to the likelihood of a soft/hard/crash Brexit with the regularity of brickwork.
The longer term trend seen on the 5 year chart is clearly down.
May’s Govt seemed to be heading for a relatively cordial divorce (good for sterling)  until the machinations of the Brexit faction bought it to a standstill in summer 2019 (bad). Johnson’s succession, majority and signed EU deal before the deadline a year ago were were received, naturally. Likewise a deal with the EU this month, though mostly priced in, would buoy sterling; while no deal will send it crashing, just like June 2016. 


 I'm not saying you are right or wrong, but I don't believe you can substantiate your claim, so it is speculation. You don't need to look out to 50 years to see that there is more afoot than Brexit in GBP:USD currency fluctuations, here is a 5 year chart:

So, if as you say, Brexit has dominated these fluctuations to the exclusion of other events, what Brexit event sent the pound tumbling between April-May 2018 from pre-referendum levels to below those seen in the weeks following the referendum result?


Theresa May published her Chequers plan in July 2018, which outlined a relatively soft Brexit, yet the pound continued to fall through July and into August, why was that?
With a broad brush, the parliament appointed on 2017 GE result was painted as an enabler for a soft Brexit, and that’s where negotiations were perceived to be heading, not least by hardcore Tory Leavers.


  EU leaders rebutted TM's Chequers plan in September 2018, accusing her of trying to cherry-pick, and it was dismissed as illegal due to issues with the Irish border, yet the pound strengthened during this period. Shouldn't it have weakened?


When May’s Govt became stymied it did indeed weaken, until the nadir of Summer 2019.

The election campaign began in early October 2019, with BoJo campaigning for a harder Brexit, he wins the election with an 80 seat majority on 12 December and fills his cabinet with ardent hard Brexiteers and pledges to walk away from negotiations in July and go for a no deal Brexit if talks aren't making enough progress. The pound rises through this period and right out to the end of January, despite the risk of a no deal brexit increasing significantly.


The risk of no deal was averted a year ago with Johnson signing a deal.

What Brexit event happened in March 2020 that sent the pound tumbling to an all-time low? It must have been just a coincidence that this was when the severity of the Covid crisis became apparent.


No, that was the covid crisis. Although it had been about for months, it was late Feb/ March when financial markets truly panicked. The dollar is the world’s reserve currency and was considered a safe haven until the Fed steadied the ship with a very strong QE undertaking.

Why is the current exchange rate about the highest it's been since May 2018? Are the currency speculators really more positive that a free trade agreement will be done than at any time in the past 2.5 years? How are you determining that the rises in the past couple of months are due to Brexit optimism vs Covid vaccine optimism? 


 Covid is a whole world problem. Why would £ rise against € or £?
Expectation is still for a deal. Through the noise, you can gauge the likelihood of a deal on the strength of sterling.

I hope that sketches some sort of rationale for currency movements around the points chosen 
(did someone mention whataboutery?) but, clearly, people are going to attribute different reasons for the same result. So, even if the conclusion of negotiations results in £ rising on a deal or crashing on no deal, some people are going say effect has another cause. 
Of course, any pair of currencies have other factors affecting their relationship. For example USA/China trade tensions impact on the five year chart above. That’s why it helps to isolate the impact of a factor like Brexit in all its variants. To me, there is nothing ambiguous about the way the currency trades on Brexit news. Being inside the single market is reckoned to be an economic advantage.
Don’t take my word for it though..let’s see how the FX markets react in the coming weeks.