HSBC on British Pound Outlook: Investors Might be "Leaving and not Coming Back", Could Yesteryears Highs vs. Euro and Dollar be Consigned to the Past?
Thursday, 09 August 2018 12:40
HSBC exchange rate forecast
- HSBC warn of a "tectonic" shift could be underway for Sterling

- Long-term demand for UK assets may be hit as investors "go away and don't come back"

- Markets even more pessimistic than pessimistic Bank of England

A structural shift away from the British Pound may be happening warns an HSBC economist who suggests much of the weakness displayed by the currency of late might be irreversible.

Pound Sterling is down 1.25% against the Euro and US Dollar over the course of the past give days as fears continue to simmer that the UK will tumble out of the EU on a 'no-deal' basis.

The slide in Sterling comes despite the the Bank of England (BoE) raising interest rates at last Thursday's policy meeting - a move typically associated with a rise in the currency.

Higher rates usually attract greater inflows of foreign capital with the promise of higher returns, thus boosting the currency in the process, however, due to anomalous risks associated with Brexit the opposite may in fact be happening.

Sterling has failed to move higher after the rate hike and instead has fallen to multi-month lows as Brexit fears have clouded the outlook.

And, the adjustment may be indicative of far-reaching developments in currency markets which could affect the Pound for years to come, according to one strategist.

Longer-term holders of the currency such as central banks and large sovereign funds may actually be reducing their Sterling reserves on a semi-permanent basis, as they did the Euro during the Eurozone debt crisis.

"Perhaps there are investors who are exiting Sterling. They are leaving and not coming back. So that is the challenge for Carney and the BoE - they are seeing a structural shift away from the currency and the market," says Steven Major, head of global fixed income at HSBC.

The Pound-to-Euro exchange rate is seen hovering at the bottom of a long-held range between 1.11 and 1.15 as markets break with the assumption that an amicable pro-business Brexit deal will be reached. The Pound-Dollar exchange rate meanwhile continues its resolute trend lower, showing very little respect for technical support levels.
https://www.poundsterlinglive.com/gbp-l ... bc-warning

Pound slides after Johnson reveals plan to suspend parliament
Business leaders voice alarm over economic impact, as sterling falls to six-day low
Richard Partington
Last modified on Wed 28 Aug 2019 13.15 BST

The pound has come under intense selling pressure after Boris Johnson announced plans to suspend parliament for five weeks before the Brexit deadline, raising the chances of a no-deal exit from the EU.

Sterling sold off sharply on the foreign exchanges on Wednesday morning, falling by more than a cent against the US dollar to a six-day low of below $1.22, and by almost as much against the euro, to €1.096.

Sterling clawed back some of the losses by midday as MPs voiced anger at the prime minister’s plan. Senior business figures also sounded the alarm over the potential impact on the economy.
https://www.theguardian.com/business/20 ... parliament

I still have absolutely no idea what positives Brexit was/is meant to bring. Utterly inept career politicians driving a country off a cliff so they can make a few quid whilst everyone else suffers. sociopaths or full-blown psychos?

Boris Johnson doesn't look like he has a molecule of empathy within himself.

The system is outdated and needs changing, peerage, bloodlines etc must be done away with. It's utterly depressing.

I'm hoping I can get good at my new job then request working remotely and move to Asia and live out my days away from it all.

Soon, the words 'United', 'Great', 'Britain', 'Northern', and 'Ireland' will have to be removed from that passport.
Replacing it all with 'Kingdom of England and Wales' (or what's left of it).
And maybe even 'Kingdom' will then disappear.
Good luck!

cautious colin wrote: ↑Wed Aug 28, 2019 9:05 pm

JUDGEDREDD wrote: ↑Wed Aug 28, 2019 8:25 pm I still have absolutely no idea what positives Brexit was/is meant to bring.

Need I say more

Yes you need to say more as the union will break up next. So then what passport will you have? Brexit and all this rise in nationalistic xenophobia is a step backwards.

lets just see how strong the euro is against the pound in 6 months or a year.
after a successful brexit some of the other nations that actually put money into the eu pot will be next to leave. leaving a big hole.

the euro is going to crash in a massive way.

JUDGEDREDD wrote: ↑Wed Aug 28, 2019 8:25 pm I still have absolutely no idea what positives Brexit was/is meant to bring

I can see positives and negatives for both sides and I don't care a huge amount either way, but to give the side you have failed to see: The Council of the European Union is a dictatorship by definition. This isn't hyperbole or word play, it's a simple point of demonstrable fact given that it's leadership are unelected bureaucrats. This is important because you can't call yourself a sovereign nation and then give a bunch of unelected people in a foreign country the power to dictate what laws you have to adopt. That isn't racist or xenophobic, and anyone who claims it is is doing so because it's easier than trying to argue against the actual point itself.

Again though, that's just me presenting that side of the argument because you pretty much asked for it. The obvious counter argument to it is that if we're that concerned about unelected bureaucrats, we should start by getting rid of the house of Lords, and that's something you won't hear many people argue against.

Bubble T wrote: ↑Wed Aug 28, 2019 11:58 pm

JUDGEDREDD wrote: ↑Wed Aug 28, 2019 8:25 pm I still have absolutely no idea what positives Brexit was/is meant to bring

I can see positives and negatives for both sides and I don't care a huge amount either way, but to give the side you have failed to see: The Council of the European Union is a dictatorship by definition. This isn't hyperbole or word play, it's a simple point of demonstrable fact given that it's leadership are unelected bureaucrats. This is important because you can't call yourself a sovereign nation and then give a bunch of unelected people in a foreign country the power to dictate what laws you have to adopt. That isn't racist or xenophobic, and anyone who claims it is is doing so because it's easier than trying to argue against the actual point itself.

Again though, that's just me presenting that side of the argument because you pretty much asked for it. The obvious counter argument to it is that if we're that concerned about unelected bureaucrats, we should start by getting rid of the house of Lords, and that's something you won't hear many people argue against.

Some good thinking Bubble. but maybe not so cut and dried about EU/sovereignty. The world is full of treaties, trade agreements, conventions, international law, etc, that countries voluntarily sign up to. They willingly surrender some elements of "sovereignty", but do so consciously and for greater benefits.
Just an observation. I can see + and - on both sides too.

Bubble T wrote: ↑Wed Aug 28, 2019 11:58 pm

JUDGEDREDD wrote: ↑Wed Aug 28, 2019 8:25 pm I still have absolutely no idea what positives Brexit was/is meant to bring

I can see positives and negatives for both sides and I don't care a huge amount either way, but to give the side you have failed to see: The Council of the European Union is a dictatorship by definition. This isn't hyperbole or word play, it's a simple point of demonstrable fact given that it's leadership are unelected bureaucrats. This is important because you can't call yourself a sovereign nation and then give a bunch of unelected people in a foreign country the power to dictate what laws you have to adopt. That isn't racist or xenophobic, and anyone who claims it is is doing so because it's easier than trying to argue against the actual point itself.

Again though, that's just me presenting that side of the argument because you pretty much asked for it. The obvious counter argument to it is that if we're that concerned about unelected bureaucrats, we should start by getting rid of the house of Lords, and that's something you won't hear many people argue against.

I'm not sure how you've managed to conclude that I wasn't already aware of this, I can see how some would consider this a positive however leaving their dictatorship doesn't make a whole lot of difference when we will have to conform to their rules anyway.