Article 50 - £ and the USA $
Discussion
Hi, I'm traveling to the USA later this year and thought, would I be better off in exchanging my currency before after article 50 is triggered or after? not even sure what the exchange rate is at present either. Do you guys expect the £ to take a big hit after article 50 is triggered?
Thanks in advance
Thanks in advance
I'm going to take this thread at a slight tangent to '£ and the EUR' - thinking of opening a long position. Been waiting for over a year, and I feel it has bottomed out with the UK economy looking reasonably stable relative to the Eurozone and the £ has priced in the worst that Brexit can throw at it. Relative to the $ is another matter - I think the £ has a bit further down to go but related to interest rate differentials not Article 50. My tuppence/cents worth anyway ..
interesting question, I have a similar dilemma but with SGD to GBP, after yesterdays inflation news of 2.3% pound jumped up slightly, only one months figures but if that trend continues, who knows, they may gently increase UK interest rates.
As for your original question ref pre or post Article 50, can't help but think its like equities and the news is already priced "in" given we know it will be triggered for sure on March 29th.. we may even see a slight increase in sterling once its announced.
Any other thoughts/opinions welcome?
As for your original question ref pre or post Article 50, can't help but think its like equities and the news is already priced "in" given we know it will be triggered for sure on March 29th.. we may even see a slight increase in sterling once its announced.
Any other thoughts/opinions welcome?
Mezger said:
ref pre or post Article 50, can't help but think its like equities and the news is already priced "in" given we know it will be triggered for sure on March 29th.. we may even see a slight increase in sterling once its announced.
Nothing is priced in as nobody has any idea what the forex rates will be, whether that's short term, medium term or long term. Sterling forex will fluctuate ball by ball in this game as rumours and real events come and go. There may be occasional runs, possibly fours & sixes before the home team's innings is out. The only certainty is that nobody knows the result.SDarks said:
My business operates in a USD currency market and I have been advised to buy as many dollars as I can before article 50 goes live. The currency trader I use expects a big drop in the pound value.
My currency 'trader' gave three possible scenarios (honestly!)1. Sharp fall to the pound
2. Pound will strengthen
3. Rates will remain nominally the same.
I kid you not!
They are as clueless as the rest of us. Will talk up their own position in order to short/long. I got badly burnt pre referendum where they all said the GBP/EUR rate would hit 1.5 - the opposite happened.
In my experience, whichever way you call it, it will go the other way!
Stig said:
My currency 'trader' gave three possible scenarios (honestly!)
1. Sharp fall to the pound
2. Pound will strengthen
3. Rates will remain nominally the same.
I kid you not!
They are as clueless as the rest of us. Will talk up their own position in order to short/long. I got badly burnt pre referendum where they all said the GBP/EUR rate would hit 1.5 - the opposite happened.
In my experience, whichever way you call it, it will go the other way!
I'll charge you half the price you're giving them and can give a similar level of advice if you're interested?1. Sharp fall to the pound
2. Pound will strengthen
3. Rates will remain nominally the same.
I kid you not!
They are as clueless as the rest of us. Will talk up their own position in order to short/long. I got badly burnt pre referendum where they all said the GBP/EUR rate would hit 1.5 - the opposite happened.
In my experience, whichever way you call it, it will go the other way!
I'm a currency trader, and as previous posters have said, nobody can really predict what will happen. I've been doing this for 11 years and if we could forecast the market I'd be in the classifieds spending millions on cars not posting in the forums while I'm at work
You can make an informed judgement though. With Article 50 coming next week it is likely the Pound will drop in the short term. Having said that, Retail Sales figures this morning have pushed the Pound higher. For the OP looking at GBPUSD, then 2 factors should be considered: A period of uncertainty re Brexit is likely to weigh on the Pound. in the States, interest rates are expected to be pushed up 3 times this year that would strengthen the USD and make it more expensive to buy. For this reason we might see GBPUSD drop below $1.20. But there's different ways of looking at it. Another posted had USD to move to GBP. YEs it might drop a bit further, but considering the rate is pretty close to the lowest it's been in more than 30 years, do you want to hold out for an inch and risk losing a yard?
Hope that's been of some use. More info on my blog for those that are interested http://foreignexchangerateforecasts.blogspot.co.uk...
You can make an informed judgement though. With Article 50 coming next week it is likely the Pound will drop in the short term. Having said that, Retail Sales figures this morning have pushed the Pound higher. For the OP looking at GBPUSD, then 2 factors should be considered: A period of uncertainty re Brexit is likely to weigh on the Pound. in the States, interest rates are expected to be pushed up 3 times this year that would strengthen the USD and make it more expensive to buy. For this reason we might see GBPUSD drop below $1.20. But there's different ways of looking at it. Another posted had USD to move to GBP. YEs it might drop a bit further, but considering the rate is pretty close to the lowest it's been in more than 30 years, do you want to hold out for an inch and risk losing a yard?
Hope that's been of some use. More info on my blog for those that are interested http://foreignexchangerateforecasts.blogspot.co.uk...
kurt535 said:
I'm wondering if the bonds start unwinding what this will do to the x rates. Any views anyone?
Surely the opposite effect to what QE has done (reduce forward yields) and thus reduce forward FX rates? In any case, I wouldn't expect the BoE to unwind QE until the economy can cope with it. P.S. I bottled and closed my long GBP/EUR position with a 1% profit (£100)!Edited:- meant QE unwind => yields down, FX rate up
Edited by fido on Thursday 23 March 21:45
fido said:
kurt535 said:
I'm wondering if the bonds start unwinding what this will do to the x rates. Any views anyone?
Surely the opposite effect to what QE has done (reduce forward yields) and thus reduce forward FX rates? In any case, I wouldn't expect the BoE to unwind QE until the economy can cope with it. P.S. I bottled and closed my long GBP/EUR position with a 1% profit (£100)!mind you, if you cant work out what to do, safest thing is probably do nothing!
The big money prices stuff in long before us peons start looking at our holiday money.
I would guess a moderately poor Brexit deal is already accounted for.
Can anyone actually see it being a great deal for UK
Medium term effects on the Dollar could be further rate rises and new trade deals. Those deals being made under threat of US import taxes.
If the US Dollar were allowed to get too strong all that would be in vain. It would also hit Dollar denominated emerging market countries reducing world trade.
So I don't believe the Dollar will move up significantly.
Any weakening of the Pound would increase inflation and put pressure on Carne to raise UK rates or the UK Gov inflation linked outgoings would spiral. Effectively supporting the Pound.
Perhaps not spiral, but certainly make budgeting difficult.
A stronger Dollar is in nobodies interest except maybe China.
A weaker Pound would not benefit UK.
I think, I may be alone, the Pound could be at 1.30 in 12 Months.
Short term fluctuations could see slightly lower rates, but I think each low would bounce back.
I would guess a moderately poor Brexit deal is already accounted for.
Can anyone actually see it being a great deal for UK
Medium term effects on the Dollar could be further rate rises and new trade deals. Those deals being made under threat of US import taxes.
If the US Dollar were allowed to get too strong all that would be in vain. It would also hit Dollar denominated emerging market countries reducing world trade.
So I don't believe the Dollar will move up significantly.
Any weakening of the Pound would increase inflation and put pressure on Carne to raise UK rates or the UK Gov inflation linked outgoings would spiral. Effectively supporting the Pound.
Perhaps not spiral, but certainly make budgeting difficult.
A stronger Dollar is in nobodies interest except maybe China.
A weaker Pound would not benefit UK.
I think, I may be alone, the Pound could be at 1.30 in 12 Months.
Short term fluctuations could see slightly lower rates, but I think each low would bounce back.
jeff m2 said:
The big money prices stuff in long before us peons start looking at our holiday money.
I would guess a moderately poor Brexit deal is already accounted for.
Can anyone actually see it being a great deal for UK
Medium term effects on the Dollar could be further rate rises and new trade deals. Those deals being made under threat of US import taxes.
If the US Dollar were allowed to get too strong all that would be in vain. It would also hit Dollar denominated emerging market countries reducing world trade.
So I don't believe the Dollar will move up significantly.
Any weakening of the Pound would increase inflation and put pressure on Carne to raise UK rates or the UK Gov inflation linked outgoings would spiral. Effectively supporting the Pound.
Perhaps not spiral, but certainly make budgeting difficult.
A stronger Dollar is in nobodies interest except maybe China.
A weaker Pound would not benefit UK.
I think, I may be alone, the Pound could be at 1.30 in 12 Months.
Short term fluctuations could see slightly lower rates, but I think each low would bounce back.
good answer. tyI would guess a moderately poor Brexit deal is already accounted for.
Can anyone actually see it being a great deal for UK
Medium term effects on the Dollar could be further rate rises and new trade deals. Those deals being made under threat of US import taxes.
If the US Dollar were allowed to get too strong all that would be in vain. It would also hit Dollar denominated emerging market countries reducing world trade.
So I don't believe the Dollar will move up significantly.
Any weakening of the Pound would increase inflation and put pressure on Carne to raise UK rates or the UK Gov inflation linked outgoings would spiral. Effectively supporting the Pound.
Perhaps not spiral, but certainly make budgeting difficult.
A stronger Dollar is in nobodies interest except maybe China.
A weaker Pound would not benefit UK.
I think, I may be alone, the Pound could be at 1.30 in 12 Months.
Short term fluctuations could see slightly lower rates, but I think each low would bounce back.
sparks_E39 said:
Just yesterday flew back to the UK after 7 days in Orlando and 3 in New York. We had a wonderful time and decided we'd rather spend all of our dollars ($2000) than suffer the miserable exchange rate on converting it back to the pound.
Um, aren't you getting your ends mixed up? The current malaise is superb for dollar holders looking to spend here. bloomen said:
sparks_E39 said:
Just yesterday flew back to the UK after 7 days in Orlando and 3 in New York. We had a wonderful time and decided we'd rather spend all of our dollars ($2000) than suffer the miserable exchange rate on converting it back to the pound.
Um, aren't you getting your ends mixed up? The current malaise is superb for dollar holders looking to spend here. Gassing Station | Finance | Top of Page | What's New | My Stuff