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Byron

Exactly Why Did The Pound Fall In Value?

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Was it just Forex gamblers, was the pound only really worth 1.30 dollars all along?

Anyone know?

Be too difficult to know, as the top man at the BoE talked the pound down for several months and then at the crack of dawn on the day of the result boasts about how he will print money and drop interest rates.

When things go bad in the Eurozone it'll be back in favour.

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Be too difficult to know, as the top man at the BoE talked the pound down for several months and then at the crack of dawn on the day of the result boasts about how he will print money and drop interest rates.

When things go bad in the Eurozone it'll be back in favour.

They've already excreted another potenital £150bn into the money pit that counts for a currency.

Post-Brexit bank boost ‘more powerful than QE’ says Carney

http://www.telegraph.co.uk/business/2016/07/12/post-brexit-bank-boost-more-powerful-than-qe-says-carney/

In the wake of the referendum vote to leave the EU, the Bank of England told banks they can use their £5.7bn counter-cyclical capital buffers to boost lending, freeing up as much as £150bn of lending capacity.

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They've already excreted another potenital £150bn into the money pit that counts for a currency.

Post-Brexit bank boost ‘more powerful than QE’ says Carney

http://www.telegraph.co.uk/business/2016/07/12/post-brexit-bank-boost-more-powerful-than-qe-says-carney/

In the wake of the referendum vote to leave the EU, the Bank of England told banks they can use their £5.7bn counter-cyclical capital buffers to boost lending, freeing up as much as £150bn of lending capacity.

More debt to sort out a debt problem, and to pour it into over priced assets, how did the BoE survive without this economic guru for 350 years.

Sad that recessions are promoted by the MSM, BoE, FED, EU, IMF etc etc... as something that will destroy us all as opposed to a healthy part of the economic cycle.

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The pound was going to have to correct anyway at some point due to the appalling current account balance. Whether that would have resulted in a step change or not I have no clue.

You won't see much discussion of this on the BBC though.

Actually you can see the idiocy in this analysis here :

http://www.bbc.co.uk/news/business-35931968

The so called economics editor seems to fail to realise that it is a huge current account deficit that is likely to precipitate a sterling crisis, and a Chancellor that says it would be unwise to take any "economic risks" while the CAD is rising so fast. The mind boggles. Presumably the idea is to let it go on rising indefinitely.

Edited by Gigantic Purple Slug

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More sell orders hitting the market for a short while than buy orders is the reason. Things are back in balance now. As for why a lot of people sold GBP immediately after the Brexit vote, I assume that was a combination of a genuine belief that the economy was going to tank as a result along with a lot of hedge fund type gambles being unwound.

As others have said, a balance of payments deficit will tend to push down GBP over time, although it's more complex than you might expect since other factors are involved too (e.g. relative inflation rates between two currencies, QE, action by central banks, etc.).

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My take is that it was already nailed on that the pound would fall. There is no way that we can run sort of deficits that we do and not expect it to fall significantly.

However Brexit (both pre and post) was a trigger point for the actual drop.

For the last 20 years or so £1 = $1.60 has been the bench mark. Now I think it will slip to £1 = $1.30 for a few years, before dropping yet again.

It is funny how people so easily get used to these drops. If people stopped and asked themselves awkward questions, like how can it be the at was once £1 = $5 they would soon start to realise what a mess the last 100 years has been with almost every uk leader being a failure. They would also realise in the end this won't end well. (Sadly I don't know when "in the end" is)

Edited by reddog

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According to the bloomers there are record number of short positions on the pound.

You can sure carnage will entertain his bankster mates with a cut. Oughta be illegal....

http://www.bloomberg.com/news/articles/2016-08-01/hedge-funds-are-most-bearish-on-pound-before-boe-rate-decision

Could the Bank of England finally be 'running out of room'?

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Well, you cannot print money without a depreciation of its value.

Quantative easing my foot....Weimar republic more like.

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Why hasn't the price at the pumps dropped? Wasn't this always the excuse, the USD exchange rate as oil is priced in USD?

The price at the pump that I get my petrol from has dropped by a penny per litre over the last week.

More impressively, despite the sharp fall in the pound immediately post Brexit vote, there were no rises.

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