Pulaski

Thank you. That is what I have been trying to tell you for several days!

Moonsquirrel

Good to hear Pulaski, you're a smart chap (always trust a picture of Clarkson). Torn between panic moving all my savings now before it gets worse, or just holding out for potential recovery O_o

RoadWarriorFromLP

The sterling isn't down for cyclical reasons that will eventually correct with time, but because the market expects that a Brexit would probably be a minor or major disaster.

You can think of the exchange rate as the equivalent of UK Ltd.'s share price. The market is understandably bearish because most international businesses that are forced to choose between the EU and UK will choose the EU, and there is a threat that London will lose its status as a global financial center.

I suspect that Brexit will die a quiet death, which would be good for the pound. If Brexit becomes reality, then it will come down to whether the UK can cut a decent trade deal with the EU; if things are left up in the air or if these issues can't be resolved quickly, then the pound could fall further.

mrken30

It's also not good that the UK is lowering rates , while the US is raising rates. Historically the US has recovered more quickly than the UK, so the pound will probably fall more.

Atleast we don't have the miner strikes and everything else that was going on last time the pound dropped like this.

mrken30

Just thought I'd checkup where sterling was in the Big Mac index, Britain is still above South Korea which is good.

mrken30

Now below 1.199 today, still going down. It makes it easier to move back to the UK if I ever decide to by making house prices cheaper.

scrubbedexpat091

Upside to a lower currency is it might be good for tourism. At least when our dollar falls up north, tourists start to come in droves because Canada is finally a cheap destination.

Wintersong

Wish we'd waited a little longer before booking this year's holiday in Italy...

Pulaski

Good for tourism and exports, but makes imports expensive, so, given that Britain imports many things including raw materials and a lot of foods, a falling currency is likely to increase the inflation rate. For both manufacturers and service companies a weaker currency makes labour costs and factory/office space cheaper.

Overall the British economy is finely balanced, depending on imports and exports, so the impact is often patchy and can be hard to predict.

scrubbedexpat091

Probably not much different here. Low loonie leads to food and other consumer goods costing more, but also boosts some sectors that had suffered for many years, but like anything some sectors lose when its high, others lose when it's low, just depends what sector your in.

SultanOfSwing

You used Canada and cheap in the same sentence. Not a very common occurrence, that.

scrubbedexpat091

No it's not, but for American's with US$ Canada becomes an attractive destination when the loonie drops.

1 British pound still gets you 1.59 CAD$ approx so not so bad for those with British currency either. (roughly as exchange rates vary by bank/credit card etc.)

I am sure our lovely loonie has dropped against other currencies as well, but they (media) really only report its value against the US$.


For Australian's not so much, AUD$ and CAD$ are about par.

SultanOfSwing

Exchange rate now is about what it was when I was up there. US$300.00 bought me about CA$365.00 after fees and whatnot, but I burned through that pretty quickly. Hopefully next time I go, it'll be more of a favourable rate for me ...

Looks like my dollar will buy me 83p at the moment. Might be a good time to start changing some cash in anticipation of our trip this summer ...

robin1234

But the British pound was approx $2.00 CAD a year ago! So about the same loss of value in Canada, as pound/US dollar.

jeepster

The UK has a trade deficit with the EU, Brexit is more of a problem for the EU especially with the falling Pound Note.