f2calv
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arigoldman
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CNBC announced that the cause of the market drop is due to "market abuse by individuals caused by lack of liquidity by banks".
Atilla
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Fundamentally, the UK BoP current account has always been negative. Historically, this has been topped up by service industries and hot capital flows.
Finance industry is coming under pressure with companies planning to move out of London. This in turn will reduce the service sectors contribution to BoP, thus further aggravating the deficit.
Sadly, foreign investors will sell UK assets as falling pound will mean they'll take a currency hit. With cost of imports rising along with an expected and policy based actions to raise wages, suddenly UK doesn't look like a good place to do business.
With government increasing fiscal stimulus on infrastructure projects by increasing borrowing will only increase supply of pounds.
I'm afraid continued falls in pound is the only way to go to correct the current account.
Add a fraction more on those falls to factor in uncertainty re:Brexit and if we stop at 1.20 we are doing well imo.
Finance industry is coming under pressure with companies planning to move out of London. This in turn will reduce the service sectors contribution to BoP, thus further aggravating the deficit.
Sadly, foreign investors will sell UK assets as falling pound will mean they'll take a currency hit. With cost of imports rising along with an expected and policy based actions to raise wages, suddenly UK doesn't look like a good place to do business.
With government increasing fiscal stimulus on infrastructure projects by increasing borrowing will only increase supply of pounds.
I'm afraid continued falls in pound is the only way to go to correct the current account.
Add a fraction more on those falls to factor in uncertainty re:Brexit and if we stop at 1.20 we are doing well imo.
the reason: the big banks selling it by yards(1bl) while you sleeping,don't forget they are the liquidity providers too, so they know their client's position. so easy for them to make money.
here is some of them:
https://postimg.org/image/t8q6ig2xd/
Hope that under individuals they meant "algo traders which sold huge amounts of pound breaking key supports where consequent freefall is obvious"
Atilla
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I suspect what's happening with the pound is that after all the lime light and hard talking by UK Gov, turning down bank requests for an interval period or some kind of softening the message went out to short sterling to feel the water on level of support. Banks are international and traders do chat.
Untimely coincidence perhaps by the French president remarks over-night the decision to sell sterling met with no resistance. So lots of sell orders nothing on the buy side and algo's kick in, and hey presto!!!
1.28 - 1.32 band feels so far away right now and I would suspect 1.28 will become very strong resistance to any rises.
Unless UK Gov softens stance to finance sector, further lows will be probed.
fwiw - I quiet fancy 1.20-1.25 range next. Hope I'm wrong... :whistling
Untimely coincidence perhaps by the French president remarks over-night the decision to sell sterling met with no resistance. So lots of sell orders nothing on the buy side and algo's kick in, and hey presto!!!
1.28 - 1.32 band feels so far away right now and I would suspect 1.28 will become very strong resistance to any rises.
Unless UK Gov softens stance to finance sector, further lows will be probed.
fwiw - I quiet fancy 1.20-1.25 range next. Hope I'm wrong... :whistling
I agree. We might see some retracement after such a massive drop, but for the moment the pair remains very bearish.
The British pound continued to depreciate against the dollar for a third day on Monday. The pair slid 35 pips to 1.2359, with a decline of over 5% for the past eight sessions. Trading took place in the final values 1.2443 and 1.2344. Technically the bears remain in the leading position, but recovery of the RSI and inability to breakthrough from current levels may lead to start of an upward movement.
