Sterling seems artificially weakened this week. Down heavily on very little news, let alone bad news.
The current strength in the Euro (which has risen as strongly as sterling has weakened) will come back to bite them in the arse too. “Let’s make Euro Exports more expensive when unemployment is already beyond 20% in some places!”
Can’t see that helping the hapless Euroworker, especially in transport somehow…
The interesting thing from the transport perspective, is that INLAND work here in the UK should now pick up strongly as a result of weaker sterling, whilst EURO work will come under further pressure. Euro-denominated transport contracts are now going to be quite a bit more expensive compared to as recently as last week!
I don’t think the end of this quarter will confirm the UK into a triple dip recession as of now.
Winseer:
So no one is excited over the prospect of getting more work than usual for the first three months of the year then?
Carryfast must be on shift…
Have you thought about the drawbacks as well as the advantages and the probable reasons behind the fall.Those being the gradual realisation in world money markets that the pound is based on a collapsing economy.
By the way the pound was worth around 10.5 Swiss Francs in 1970 and over 12 in 1965.No surprise that it was a reflection of a stronger economy not that we had loads of people out of work because of it.
The recent rise in the EURGBP rate is rather suspicious. Markets are often “news driven”, but not on this occasion.
The rate has made a large move on little or no news, suggesting that there is a serious attempt to weaken the pound underway - and I suspect from within rather than from without!
Immigrant cash being sent home will be worth less, encouraging those immigrant workers here to fully integrate, and cut ties from the old country.
UK citizens spending money on the continent will be less inclined to do so.
Euro Citzens coming here will see their money go further, and will thus be encouraged to come over and spend their euros…
Foreign firms running into the UK will find their overhead habits more favourable to operating over here than on the other side of the channel.
Nobbies are already ahead of the game of course, since they’ve already got depots on both sides. No stopping them it would seem.
Other firms though? Only time will tell if the upward move on EURGBP is able to be sustained.
Markets have support and resistance levels where big money piles in and drives the price back the other way. Let’s see what happens when the exchange rate makes an assault on those levels, subsequently taking on the hedge funds and bank traders…
I think this game is called “Beggar thy neighbour” and is an attempt for the UK to undercut both Europe and the U$ as an alternative to the QE programme which is getting a bit long in the tooth now.
