How come the Pound goes up after the brexit vote

[muscleman]

I remember back in 2016, when the Brexit referendum passed, the pound went down sharply.

How come this time it is the opposite?

[Smile]

I read somewhere that it’s mainly about the tories being elected; brexit, even if Boris touts a no-deal exit, will take more months to negotiate.

[Viking]

I think that anything that resolves the impass is viewed as a positive for the economy moving forward as businesses will now be able to plan knowing Brexit is coming. This is better than the situation that has existed the past 3 years (where no one had any idea what was going to happen).

[petec]

It’s because the Labour Party, which is now hard left and was promising vast amounts of new borrowing to pay for public services and nationalisations, has been badly defeated.

[Guest cherzeca]

It’s because the Labour Party, which is now hard left and was promising vast amounts of new borrowing to pay for public services and nationalisations, has been badly defeated.

 

watch the dollar go up when the D nominee gets defeated next November.  same deal

[Cevian]

More than anything the markets hate uncertainty. Based on the current rhetoric it appears that Brexit is a done deal 31 Jan without the need for a second referendum. Businesses and investors can now make clear plans accordingly.

[CorpRaider]

I don't understand why commentators are talking about no deal again.  He's also already negotiated a kind of not so bad Brexit deal with Northern Ireland serving as a special EU bridge/economic development zone.  So they are saying now that the EU won't do a decent trade deal with the whole U.K?  So then, every entity in the UK sets up a "branch" in NI and gets to completely arb the rules to their relative advantage versus the EU?  Seems an unlikely outcome to me.

 

Also, I'm not really conservative, but devolved power/governance/real federalism probably does make U.K. more anti-fragile (e.g. a Greece debt situation (or whatever) doesn't take down U.K. with the whole of the E.U.; makes it easier to address local problems; increases dynamism, etc...).  I personally have always thought they are just getting out ahead of (the political union...not the trade bloc) the tide/reflective of their more dynamic and open democracy and others will follow.

[Spekulatius]

The election has removed much of the uncertainty and the prospect of a very left tilted or hung parliament, that’s why the GBP us up. Even the Eurozone likes the outcome since the Euro is up against the USD and stocks are up as well.

[SharperDingaan]

There's a difference between the night after the election - and a month after the election.

It will take a while to execute hedge strategies - especially over Xmas.

 

The nature of the win will emerge over the next few weeks, but to us - it looks pretty good.

An obvious EU trade solution is Scotland/Ireland remaining in the EU, and the rest of England leaving. Most EU/England trade 'arbitrage' (& benefits thereof) taking place on UK soil, and the 'UK' retaining Scotland, Ireland, Wales, and England in a version of federalism. Edinburgh and Aberdeen rising in prominence, at the expense of London.

 

They've made a big decision, good on them

Now it is the time to grab the bull by the horns, and push the opportunities.

 

SD

 

 

[TorontoRaptorsFan]

Once Brexit occurs there will be a massive free trade deal between the U.S. and England.

[Spekulatius]

Once Brexit occurs there will be a massive free trade deal between the U.S. and England.

 

I am sure there will be trade deal with both the EU and the US, but it won’t be free trade. The UK is going to protect their farmers (which I think voted for the Tories), so that going to make a deal more difficult in particular with the US.

 

I thought SD’s comments about Scotland splitting away were a joke, but apparently Scotland voted very differently from the rest of the UK for their own nationalist  SNP party, who wants to remain the the EU and split from the UK:

https://www.bbc.com/news/election-2019-50779402

It is conceivable that they push for another vote to either remain or split from England. The U.K. could look like Yugoslavia  when it’s all said and done. Maybe not that likely but who knows.

[SharperDingaan]

Most would expect a Scottish referendum at some point, that results in something similar to Northern Ireland (EU) and the Republic of Ireland (Non EU). Re Northern Ireland, the EU 'divorce' already has a negotiated 'back-stop' arrangement, and this would just be an addition.

 

Given that Scotland is already in the EU, the scots have to either leave voluntarily or get kicked out. The EU also has to front the costs of the required new 'borders' and customs apparatus (new money's), and the scotland/england border has always been notoriously 'porous'. Trust the scots to recognize an opportunity when they see it  ;)

 

SD

[petec]

Scottish split unlikely. Scotttish Nats did well winning seats but polls don’t show majority support for independence. And they don’t have a majority at Westminster to call a referendum anyway.

 

Scottish budget deficit is 7%, funded by England. They’re fucked if they leave. Also there is an issue of currency: they would not be allowed to keep the pound, but could not join the Euro immediately for various reasons including that deficit - this was an issue the Nats didn’t have an answer for at the last referendum.

[petec]

An obvious EU trade solution is Scotland/Ireland remaining in the EU, and the rest of England leaving. Most EU/England trade 'arbitrage' (& benefits thereof) taking place on UK soil, and the 'UK' retaining Scotland, Ireland, Wales, and England in a version of federalism. Edinburgh and Aberdeen rising in prominence, at the expense of London.

 

I'm not 100% sure what you're getting at here, but if I am reading it right this is neither obvious nor possible. It certainly isn't on the table.

[John Hjorth]

An obvious EU trade solution is Scotland/Ireland remaining in the EU, and the rest of England leaving. Most EU/England trade 'arbitrage' (& benefits thereof) taking place on UK soil, and the 'UK' retaining Scotland, Ireland, Wales, and England in a version of federalism. Edinburgh and Aberdeen rising in prominence, at the expense of London.

I'm not 100% sure what you're getting at here, but if I am reading it right this is neither obvious nor possible. It certainly isn't on the table.

 

The way I understand the situation, Mr. Johnson still needs to plane a knob off by a [new] agreement with EU before end of January 2020, ref. what Ms. May did. How will that activity [properly considering also the hollidays in front of us] fare on a timely basis?

[SharperDingaan]

Agreed, re the Scottish Nationals, but it's early days yet - and not a lot dissimilar to our own Quebec.

Until the Brexit details are settled, they can make a lot of noise with little threat of actually having to deliver - so assume they will.

 

Per the investment POV; headline driven and persistent downward pressure on the pound.

Opportunity.

 

SD

 

[petec]

An obvious EU trade solution is Scotland/Ireland remaining in the EU, and the rest of England leaving. Most EU/England trade 'arbitrage' (& benefits thereof) taking place on UK soil, and the 'UK' retaining Scotland, Ireland, Wales, and England in a version of federalism. Edinburgh and Aberdeen rising in prominence, at the expense of London.

I'm not 100% sure what you're getting at here, but if I am reading it right this is neither obvious nor possible. It certainly isn't on the table.

 

The way I understand the situation, Mr. Johnson still needs to plane a knob off by a [new] agreement with EU before end of January 2020, ref. what Ms. May did. How will that activity [properly considering also the hollidays in front of us] fare on a timely basis?

 

We have a withdrawal agreement, which parliament will approve this week. It allows 2020 to negotiate an FTA. We will see how that goes. My bet is it goes down to the wire but will be done. Unlike most FTA negotiations, this one is urgent, and nobody benefits from delays because if andeal is not done then we leave on WTO terms. That will focus the mind on both sides. The risk is Boris softens. Showing that he was willing to leave without a deal was key this summer and he must not dilute that rhetoric, although he will be under great pressure to do so.