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Something just snapped: Pound plunges 6% to $1.1841 at Asia open

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Something just snapped. This is not good, not good at all.

 

https://www.ft.com

Pound falls below $1.20 at Asia open

The British Pound has fallen through $1.20 for the first time since May 1985 thanks to a more than 6 per

cent plunge at the start of the Asian trading day.

 

 

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GBP - intraday, last 10 days : update / Last: $1.2375

 

GBP_zpsucmyeqme.gif

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Something just snapped. This is not good, not good at all.

 

https://www.ft.com

Pound falls below $1.20 at Asia open

The British Pound has fallen through $1.20 for the first time since May 1985 thanks to a more than 6 per

cent plunge at the start of the Asian trading day.

 

GBP - intraday, last 10 days : update / Last: $1.2375

 

GBP_zpsucmyeqme.gif

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I initially doubted what I saw on my screen," said Kenji Yoshii, foreign exchange strategist at Mizuho Securities.
With no clear news trigger and a strong rebound, Mr. Yoshii said the large selling orders could have been the result of a fat finger trade during thin trade early in the Asia session.
The pound tumbled to as low as $1.1789 around 2305 GMT, its lowest level since 1985.
The currency then bounced back sharply, changing hands at $1.2437 around 0035 GMT, but remained below $1.2600, where it was positioned before the early morning selloff.

(I am going to revisit THIS):

 

POSTED BY OffThePeak (3 mths ago)

BREXIT thread
I have a target for Sterling of $1.20... and perhaps lower
=====
GBP ... All-Data :
GBP-all2_zpssyax2ddc.gif
I don't think we should be too confident that this sharp drop down to below $1.20 will be the end of it.
At a minimum, I would expect a retest of $1.20, and probably a probe down to the intraday low.

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MORE - these points re: Sterling & Property are still relevant; written after Brexit

=====

OffThePeak (3 mths ago)
As expected, I am bombarded by property agents telling me it is a great time to buy property in the UK since sterling hit a new low.

There's a chance they will be right, of course

But I think there are some more powerful reasons why this may not be a great time to buy:

+ The UK may close the door to immigrants from the EU, and people may leave the UK, causing demand for property to drop
+ Interest rates may have to rise in the UK to protect the UK's currency
+ The UK economy may go into recession, cutting jobs, and pushing rents down

Of course, none of those anxious emails that I got mentioned these negative factors.

If you think Sterling is cheap, then buy Sterling. You can wait until things settle down and the waters are more calm, before you buy your next property in the UK.

(Feel free to copy this email, and send it to the manic agents, if they pester you!)
==
source

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UK just not an attractive place any more. It hasnt been for a very long time.

 

So much uncertainty around the very near term succession of the monarchy.

 

massive property/asset bubble propped up by artificially low interest rates.

 

completely broken education system.

 

civil unrest caused by mass immigration from non eu countries with polar opposite ethics and morals.

 

totally corrupt and perversly incetivised police force that put conviction targets over basic common sense.

 

totally bankrupt pension system.

 

unsustainable demographics and very very high youth unemployment.

 

Sure there is a lot more to add to that list. But the simple answer.

 

Is just.

No.

 

About the only place lower on my list of countries is Saudi Arabia.

 

Where you get your hands put through a shredder for quoting the bible.

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Just landed in Bangkok and the pound crashed. How inconvenient. Sterling is such a little drama queen. Probably threw her toys out of the pram after hearing Theresa May's conference speech.

We're leaving the EU ...just get over it.

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MORE - these points re: Sterling & Property are still relevant; written after Brexit

=====

OffThePeak (3 mths ago)
As expected, I am bombarded by property agents telling me it is a great time to buy property in the UK since sterling hit a new low.

There's a chance they will be right, of course

 

But I think there are some more powerful reasons why this may not be a great time to buy:

 

+ The UK may close the door to immigrants from the EU, and people may leave the UK, causing demand for property to drop

+ Interest rates may have to rise in the UK to protect the UK's currency

+ The UK economy may go into recession, cutting jobs, and pushing rents down

 

Of course, none of those anxious emails that I got mentioned these negative factors.

 

If you think Sterling is cheap, then buy Sterling. You can wait until things settle down and the waters are more calm, before you buy your next property in the UK.

 

(Feel free to copy this email, and send it to the manic agents, if they pester you!)

==
source

 

3 excellent reasons to leave UK property alone.

 

As an aside,I was weighing whether to buy a South African home as the Mrs R is a Saffer.At the time the rand was weaker at 28 to the pound and was in a clear weakening trend before Brexit.

 

The weakness of the currency actually put me off buying if you can figure that.......

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^ The UK's Borrow-to-Let brigade lost the legal challenge to the govt's section 24 yesterday.

 

https://www.theguardian.com/money/2016/oct/06/landlords-lose-legal-challenge-buy-to-let-tax-changes-cherie-booth

 

Expect an increase in those wanting out. Add that to the hidden numbers of bank owned empty flats that are drip-fed onto the market 'up north' and I perceive much more lender fakery being 'required'.

Or maybe it's time to let the crash occur?

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Just landed in Bangkok and the pound crashed. How inconvenient. Sterling is such a little drama queen. Probably threw her toys out of the pram after hearing Theresa May's conference speech.

We're leaving the EU ...just get over it.

 

In fact with the Pound so weak, the British economy may get a nice pop from exports.

 

But one needs to be careful about property, and see what will happen with foreigners living (and working?) in the UK,

especially in London, I think - which is most reliant upon them

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They're still blaming it on "automatic trading"

 

Flash crash sees the pound gyrate in Asian trading
BBC News‎ - 23 mins ago
Analysts say it could have been automated trading systems reacting to a news report.

 

Remember the $43 drop in Gold the other day?

It seems to me we may be seeing some signs of some major player exiting markets - so far, they seem to prefer the USD

 

What's the next market to see a sharp selloff?

US stocks maybe?

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They're still blaming it on "automatic trading"

 

No way. It is following through now. Something big blew up last night.

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Thanks CG. I had thought that the 'automatic trading' line was wearing a little thin.

 

[Cable is big even in low trading periods, so it would take a very fat finger...]

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In fact with the Pound so weak, the British economy may get a nice pop from exports.

 

 

Hmm. Not much to export these days apart from debt and it would appear that is less than appealing. Who is buying the Guilts now? The governement owned banks with printed money?

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How are we to judge the significance of such 'blips'. Sure they suggest that the system is creaking at the seams and liable to blow apart at some point, but surely these signals have been sounding for some time now and everything just keeps ticking along...

 

is this latest blip in the £ particularly significant for some reason?

 

Any reason to think something is going to happen imminently, or can I go back to sleep? ;)

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There is now a rumour of a very large fund blow up and central bank involvement

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This is getting serious. BoE seeks assistance from the BIS...

 

http://www.wsj.com/articles/bank-of-england-asks-bis-markets-group-to-look-into-pounds-plunge-1475852099

 

Oct. 7, 2016 10:55 a.m. ET

WASHINGTON—The Bank of England has asked the markets committee of the Bank for International Settlements to look into the plunge in sterling during Asian trading hours, BOE Gov. Mark Carney said Friday.

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There is now a rumour of a very large fund blow up and central bank involvement

Thanks CG - cause of the £ move or effect?

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Same

 

Thanks CG - cause of the £ move or effect?

Same question I asked my source. The source refused to speculate and said to watch the japanese Yen.

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In fact with the Pound so weak, the British economy may get a nice pop from exports.

 

 

theoretically.

 

but it takes 15 to 20 years to feed into the economy.

 

start up. efficiency gains. portfolio building. developing the market before finally securing longer term export contracts once the fall has proved to be sustained longer term.

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http://www.wsj.com/amp/articles/brexit-turns-ugly-for-pound-gilts-1475840667

 

U.K. going to be the first major country since USSR to enter an inflationary currency collapse. Capital flight next from the property market as foreign money seeks protection from currency falls. I don't see a floor under sterling until it is worth 80-90 cents and we will get there quickly too perhaps by year end - will stabilise there for a while before gals resume. No evidence rates will be raised to protect the currency yet but it will come. Sad to see most Brits still clueless about current account position and implications. Brexit is not cause just the trigger real problem has been masking balance of payments with foreign investment for 30 plus years. Will be blood on streets before this is over given unprepared most Brits are for this. Very sad

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" I don't see a floor under sterling until it is worth 80-90 cents and we will get there quickly too perhaps by year end" - Lev.

 

There's been talk about a Currency Reset with the USD losing 50% of its value and GBP losing 70%.

But Against What? Gold maybe...

 

If we look at Sterling in Gold Ounces....

GBP-inGold_zpsl5rlzihb.png

 

The peak was 0.00144 Ounces

 

A loss of 70%, would take it down to: x 30% = 0.00043 Ounces.

At today's $1250 Gold price, that would be just USD $ 0.54 (!!)

 

But that's not the end of the Story....

If the USD loses Half of its value, then Gold doubles - say from last year's $1045 Low to $2090

At that price then,

Sterling at 0.00043 Ounces would be worth USD $0.898 - Or $0.90

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?.....Sterling is such a little drama queen.........

I'm afraid sterling isn't the only drama queen on the planet........fx between both sterling,the $US, and the euro has been at these levels more than once within the last twenty years...........and? ..._

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