Pound is becoming an emerging market currency

[dspp]

The analyst responsible for this news, Kamal Sharma, has taken contrarian positions on the Pound that have proven to be wrong.

EG the prevailing view around Article 50 was that triggering it would remove uncertainty and boost the pound. Sharma took an opposing view and predicted after A50 the Pound would dip (to $1.15). In the event it surged (to $1.42).

So he takes contrarian positions on GBP, sees them blow up in his face, and then says it's "unfathomable". Which is mince. He was being contrarian, so everyone else fathomed it perfectly well. By definition.......... I've seen it on I think 4 different boards on TLF alone, posted by the usual very anti-Brexit posters like Ursarminortaur and dspp.

So when I wrote I'm sure all the haters that are parroting this guy know all this already though. I was actually being sarcastic, as I'm sure they didn't have a clue, and don't care.

No sirree, the Brexit referendum date is not at all visible, no, not at all, move along there :



Not looking too good right now either is it.

- dspp

(note to Mods, this is just the standard Google preview, so is a legit image for fair use purposes)

[JamesMuenchen]

No sirree, the Brexit referendum date is not at all visible, no, not at all, move along there

Actually, if you look at a longer dated chart it does get quite hard to spot unless you know where to look.
https://www.macrotrends.net/2549/pound- ... ical-chart
Have a try.

But the referendum date has nothing to do with what I wrote, unless you are agreeing with me that the GBP moves mostly in response to changes in it's own economy (which is what makes it "fathomable" and is not a feature shared with emerging market currencies).

[dspp]

No sirree, the Brexit referendum date is not at all visible, no, not at all, move along there

Actually, if you look at a longer dated chart it does get quite hard to spot unless you know where to look.
https://www.macrotrends.net/2549/pound- ... ical-chart
Have a try.

But the referendum date has nothing to do with what I wrote, unless you are agreeing with me that the GBP moves mostly in response to changes in it's own economy (which is what makes it "fathomable" and is not a feature shared with emerging market currencies).

You are not trying hard enough. If you go back further then you can even get some straight lines,
http://www.miketodd.net/encyc/dollhist-graph.htm

It is entirely fathomable that the financial markets think the Brexit process is not a good thing for the UK economy. The evidence for that opinion from the forex markets is in front of all our eyes in the exchange rate.

It is also possible that financial markets will come to the view that GBP will take on features seen in emerging market currencies, but if I gather correctly you disagree with those commentators. Nevertheless on current trends GBP is going to disappear into that little sliver marked 'other'.

https://en.wikipedia.org/wiki/Reserve_c ... encies.png

- dspp

[JamesMuenchen]

It is entirely fathomable

Thanks. That was my point too.

It is also possible that financial markets will come to the view that GBP will take on features seen in emerging market currencies, but if I gather correctly you disagree with those commentators.

Well, it's possible.

A few things would need to change, other than just a bit of volatility.

The most obvious ER driver is interest rates. Currently the UK has lower interest rates than the USD. (Actually 0.1% vs 0.25%). Unlike any actual emerging market currency which are all paying in whole numbers ... around 5% or so.
https://tradingeconomics.com/country-list/interest-rate

So there is a carry trade between USD and high interest paying emerging market currencies.

Then you would need to have most debt denominated dollars.

Then there's dollarisation.

I could go on but I fear it is a waste of time.