Brexit , will it effect Sterling?

[i claudius]

Pesonally i believe the thing that will effect the pound is the uncertainty of what is going to happen , but once it is resolve and hopefully we leave then the pound will strengthen . what do you lot think?

[TheSiemReaper]

I think Brexit will cause the pound to plummet... it will be the final declaration that Britain intends to become a 3rd world nation and our currency will be valued accordingly. Leaving Europe is economic suicide for the UK.

Edited February 15, 2016 by TheSiemReaper

[SgtRock]

Sterling will most likely have a short term downward trend.

I also believe that a Brexit will start a domino effect. It is not just the UK that is not happy with the EU.

Once the rumblings start from other Countries about leaving the EU, investors will flock back to the UK. Sterling has been around a long time compared to the euro.

[NeverSure]

Ask yourself. Which would you rather have. Pounds or Euros? One of the reasons the pound is strong is that many people don't want to store wealth in Euros.

[KarenBravo]

It'll plummet.

[emilymat]

As an ordinary 'Joe' I can't give any logical reason for up or down. I just have the gut feeling it will fall.

It's a never ending worry, the state of the pound etc. When it fell to around 46 last year (?) I was on the verge of quitting Thailand with my frozen pension devaluing almost daily. Then of course we slowly recovered to around 55 and I decided that's OK. Then it started slipping again but it seems to be a bit stable now.

However, I have learned that currencies seem to have no relationship to the 'economy' of the country. (Take Thailand for instance). It's all about confidence and speculation I guess.

So, the uncertainty of the referendum will, in my view make the pound dodgy. Also, what about the nightmare scenario of a UK Brexit with the Scots then demanding their own referendum on independence and getting a yes vote. What would they do then?. Keep the pound or apply for membership of the EU and maybe use the Euro? More chaos!.

The irony for me when the pound was falling against the baht, it was rising against the Euro and then is when I was really considering going to Spain to live. That of course might be a different proposition if we quit Europe.

Anyway, I sound like a neurotic on this but, in fact what I did, was to bring substantial amount of sterling over here when it was 55. Since then I've just decided to quit worry about it. There's nowt any of us can do, but I would like stability instead of the yo-yo fluctuations.

Oh for the old days of 70 baht plus !!

[OJAS]

It'll plummet.

To parity with the satang, maybe??

But one upside in such an extreme eventuality, of course, would be that one of those irritating 25-satang coins which frequently end up in your loose change following a trip to Tesco Lotus or Big C could then be used to pay for a decent-sized round of drinks during a trip back home!!

[i claudius]

I think Brexit will cause the pound to plummet... it will be the final declaration that Britain intends to become a 3rd world nation and our currency will be valued accordingly. Leaving Europe is economic suicide for the UK.

My brother actually owns quite a large company and trades with Europe ,he doesn't think it will make a lot of difference,they need us more than we need them ,look at HSBC. Going on about leaving if we leave the EU, well they have now decided to stay , so will all the other company's

[MaeJoMTB]

Ask yourself. Which would you rather have. Pounds or Euros? One of the reasons the pound is strong is that many people don't want to store wealth in Euros.

The pound is very weak against the Euro.

It's lost 10% in the last month.

When the Euro was first invented 1.6 to the pound.

Today 1.28 to the pound.

Because we Brits didn't enter the Euro, we have already LOST 20% of our money.

[HauptmannUK]

It is correct that since the introduction of the Euro, Sterling has lost about 20% of its value relative to the Euro. If the UK had started to use the Euro in 2002 then expats would have about 20% greater buying power now than they have using Sterling.

I am not at all keen on the UK remaining in the EU, however my cousin works for a major bank in the City and they are currently putting together a strategy to deal with a predicted sharp fall in Sterling if the vote is to leave the EU. Large volumes of Sterling are already being swapped for Dollars and Euros. SInce the big banks are already factoring this into their calculations I think it is fair to say that it will come to pass..... I predict a lot of UK expats in Thailand falling on 'hard times' in the next twelve months.

On the advice of my cousin I already converted almost all of my Sterling cash savings into Dollars last September at £1=$1.55, we are now at £1 = $1.42 - so that was damn good advice and I wouldn't be surprised to see $1.20 if the vote is to leave. From a purely selfish perspective (my pension's buying power in Thailand) I would like the vote to be to stay in EU...

[emilymat]

It is correct that since the introduction of the Euro, Sterling has lost about 20% of its value relative to the Euro. If the UK had started to use the Euro in 2002 then expats would have about 20% greater buying power now than they have using Sterling.

I am not at all keen on the UK remaining in the EU, however my cousin works for a major bank in the City and they are currently putting together a strategy to deal with a predicted sharp fall in Sterling if the vote is to leave the EU. Large volumes of Sterling are already being swapped for Dollars and Euros. SInce the big banks are already factoring this into their calculations I think it is fair to say that it will come to pass..... I predict a lot of UK expats in Thailand falling on 'hard times' in the next twelve months.

On the advice of my cousin I already converted almost all of my Sterling cash savings into Dollars last September at £1=$1.55, we are now at £1 = $1.42 - so that was damn good advice and I wouldn't be surprised to see $1.20 if the vote is to leave. From a purely selfish perspective (my pension's buying power in Thailand) I would like the vote to be to stay in EU...

Thanks for the info.

I've never been into exchanging currency etc but I wouldn't mind considering moving some of my UK sterling savings - which are earning no real interest - into dollars. Is it a simple process?. This might not be appropriate of course for this forum but I have no idea how to start. Ta

[Henryford]

I think Sterling will fall initially after the OUT vote but when the evil Empire, and the Euro, collapses Sterling will rise again as a safe haven.

[KarenBravo]

I think Sterling will fall initially after the OUT vote but when the evil Empire, and the Euro, collapses Sterling will rise again as a safe haven.

The safe haven currencies are traditionally the US dollar and the Swiss Franc. Why would that change in Sterling's favour?

[nong38]

Its an interesting question is it not? Life is all about opinions and what ifs, thats what makes it interesting.

I am of the opinion that the UK would survive well outside the EU once it had managed to extricate itself and sorted out the trade deals, however, that would take time and what would happen in the time it was all being dealt with, some think the £ would fall but what about the Euro would that be damaged if we left, after all we are the 2nd largest economy in the group and currently the most successful.

Most people I have sort the opinions of Brexit on, well 100% actually, want to leave but I wonder if that would be the same reaction if you considered that initially the £ might fall by say 10 or 20 %, would you put up with a reduced exchange for a few years to rid yourself of the meddlers from Brussels? Does make you think.

[billd766]

Its an interesting question is it not? Life is all about opinions and what ifs, thats what makes it interesting.

I am of the opinion that the UK would survive well outside the EU once it had managed to extricate itself and sorted out the trade deals, however, that would take time and what would happen in the time it was all being dealt with, some think the £ would fall but what about the Euro would that be damaged if we left, after all we are the 2nd largest economy in the group and currently the most successful.

Most people I have sort the opinions of Brexit on, well 100% actually, want to leave but I wonder if that would be the same reaction if you considered that initially the £ might fall by say 10 or 20 %, would you put up with a reduced exchange for a few years to rid yourself of the meddlers from Brussels? Does make you think.

I think I could live, but less comfortably with a 10% reduced exchange rate depending on how long it lasted.

[HauptmannUK]

Hugely greater funds are held in Euros that in Sterling, so in the financial sector Sterling is now classed as a 'Third Tier' currency. The ECB still has massive funds on hand to protect the Euro - Sterling is relatively vulnerable. Although there was a lot anguish about the Greek crisis, it must be remembered that the Greek economy is actually very small (to put it into perspective, about the same size as the economy of the greater Dusseldorf region in Germany). If the UK leaves the EU Sterling will become much weaker and more volatile.

I also don't think that the Eastern European migrant situation will change much if the UK leaves. UK business is very much addicted to cheap labour and business lobbying is one of the reasons for relatively high levels of inward migration to the UK for many years.

[nong38]

It is correct that since the introduction of the Euro, Sterling has lost about 20% of its value relative to the Euro. If the UK had started to use the Euro in 2002 then expats would have about 20% greater buying power now than they have using Sterling.

I am not at all keen on the UK remaining in the EU, however my cousin works for a major bank in the City and they are currently putting together a strategy to deal with a predicted sharp fall in Sterling if the vote is to leave the EU. Large volumes of Sterling are already being swapped for Dollars and Euros. SInce the big banks are already factoring this into their calculations I think it is fair to say that it will come to pass..... I predict a lot of UK expats in Thailand falling on 'hard times' in the next twelve months.

On the advice of my cousin I already converted almost all of my Sterling cash savings into Dollars last September at £1=$1.55, we are now at £1 = $1.42 - so that was damn good advice and I wouldn't be surprised to see $1.20 if the vote is to leave. From a purely selfish perspective (my pension's buying power in Thailand) I would like the vote to be to stay in EU...

Sounds like the Banks might be trying to manipulate the markets again, they are good at that arent they? No wonder they are so popular.

[chiang mai]

IF the UK leaves and IF the union collapses as a result, IF, GBP will be seen as a safe haven fund for transient Euro holders hence it will appreciate.

Edited February 18, 2016 by chiang mai

[KarenBravo]

IF the UK leaves and IF the union collapses as a result, IF, GBP will be seen as a safe haven fund for transient Euro holders hence it will appreciate.

One more time........

"The safe haven currencies are traditionally the US dollar and the Swiss Franc. Why would that change in Sterling's favour"?

[emilymat]

IF the UK leaves and IF the union collapses as a result, IF, GBP will be seen as a safe haven fund for transient Euro holders hence it will appreciate.

One more time........

"The safe haven currencies are traditionally the US dollar and the Swiss Franc. Why would that change in Sterling's favour"?

I agree. I think the reality is that this idea of the pound becoming some safe haven is wishful thinking.

All I know is that money markets appear to be driven, to a large extent, by 'confidence' or, on the other hand, 'uncertainty'. Obviously there are also other highly complex monetary and debt issues that affect a currency's strength or weakness.

Now, a vote for exit from the EC will create that uncertainty, as of course will the run up to a referendum. We will have further problems with Scotland's position if the vote in that country was to remain, thus maybe triggering a further independence referendum, Also there will be a problem with Ireland, as, even as and island nation we will still have a land border with the EU. What happens if the immigrants start using that route?. Will we have to set up a border fence etc?.

So, I just feel the pound is pretty certain to fall and the UK government will be quite happy about this, as that will encourage exports to the new markets. As Harold Wilson said "This does not mean the pound in your pocket will be worth anything less tomorrow than it is today". That's true, unless you are an ex pat relying on a reasonable exchange rate.

My money is on us remaining. Not because DC is an ace negotiator, but due to the British tendency to support the status quo. However, I think it will be a close call. Ironically this may well lead to an immediate little jump in the value of sterling.

At the end of the day there's little we can do as ordinary mortals, except cast our vote. We still will need either 65,000 baht a month income or 800,000 in the bank - and some might struggle to meet this if there were a major collapse of sterling. (Why we need that much is a mystery to me, given the average Thai salary, but that's another issue).

Dunno about others, but I'm just going to get on with life and see what the future brings.

[chiang mai]

IF the UK leaves and IF the union collapses as a result, IF, GBP will be seen as a safe haven fund for transient Euro holders hence it will appreciate.

One more time........

"The safe haven currencies are traditionally the US dollar and the Swiss Franc. Why would that change in Sterling's favour"?

http://www.telegraph.co.uk/finance/economics/12127776/Brexit-would-trigger-disintegration-of-the-EU-not-the-UK-say-Barclays.html

[chiang mai]

Since this thread started I'd begun reading all the different view points as to what might happen to the Pound, virtually everyone except Barclays seems to be saying that GBP would fall in the event of a Brexit, the figure of USD 1.25 is frequently cited. Most commentators suggest the Pound is overvalued and has been for some time, a Brexit would see capital outflows and a slowdown of inflows with most investors being scared of the current account deficit which would likely increase.

http://www.telegraph.co.uk/finance/economics/11979631/Brexit-vote-would-trigger-a-run-on-the-pound-warns-Bank-of-America.html

But most also seem to agree that a Brexit would cause inflation to increase and that surely translates into increased interest rates, at a time when household debt is very high. It therefore seems to follow that the best solution from an economic perspective is for the UK not to leave, certainly expat exchange rates see that as the best answer so be careful what you wish for.

[Naam]

i don't think there'll be any BRexit as it would generate a lose/lose situation for all involved parties.

[chiang mai]

I wouldn't underestimate the mood of the UK population, I would never have thought that such a vast number of voters would have come out in favour of Jeremy Corbin, Far Left is very much the flavour of the day in many countries. and many people may well vote for it, just to spite Cameron.

[ThaiKneeTim]

The value of the pound will fall as a result of everyone rushing to sell in order to avoid the falling value they are creating by rushing to sell.

As someone stated, trading currencies is about confidence, so this kind of scaremongering is self prophesysing.

[nong38]

The latest news is that the talks are not going well and may well drag on until the end of the month, if a draft agreement can be done by the end of the month then the favoured date for the referendum would be June 23rd.

If no agreement is reached by the end of February then it would push the date back to October as the next likely date provided an agreement can be made in the spring, which mean that Dave is still doing his best for us and putting off having to make concrete decisions and name the day. No mention of deadlines as yet.

[chiang mai]

A very good article on the subject below, it argues that we really are not and will not be given all the comparative analysis in order to arrive at a reasoned view:

http://www.telegraph.co.uk/news/newstopics/eureferendum/12163859/Our-economic-debate-on-Brexit-has-descended-into-insultingly-superficial-scaremongering.html

Which ever group (For/Against) screams loudest and scares or comforts the people most, will win.

[nong38]

Agree with you there CM, we will only be given the information that supports any particular argument at the time. It is a huge subject with many different aspects to it. What do they really expect us to do, make a pros and cons list an vote accordingly?

I suspect that a lot of people will have gut feeling about about what they are going to do already and will need a lot of convincing to change their minds. There are a lot of respected voices in both camps as well it will an interesting few months coming up, not sure how Tony Blair backing the "in" group will be seen, who trust him as a man with a view you could trust?

[Ace of Pop]

No matter what happens ,it's an "event" ,so the dirty manipulators will twist a profit from it.

[Gary A]

I'm not a Brit, just an outsider and certainly not an economist. I think the Euro is doomed and that the pound will increase in value. At this point, I'd much rather hold pounds than Euros.