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Trading Lessons

British Pound BrExit Crash Wins Britain Currency War!

Currencies / British Pound Jun 27, 2016 - 05:58 PM GMT

By: Nadeem_Walayat

Currencies

The mainstream press is in a state of hysteria, panic even following the plunge in the British Pound from a Thursday night high of £/$1.50 to currently stand at £/$ 1.32. Whilst yes the 12% downwards plunge from £/$1.50 is in forex markets terms HUGE, a move not seen the likes of for many decades that takes the dollar exchange rate down to levels last seen in 1985. Nevertheless the mainstream press has missed one fundamental fact for the obvious reason that they just DO NOT understand the financial markets and what the market movements actually mean or translate into.


For instance the MAIN Forex markets story for the whole of this year, in fact for virtually much of the past 5 years has been the Currency Wars, one of central banks attempting to competitively DEVALUE their currencies against one another's in an attempt to IMPORT Inflation and EXPORT deflation. Which I have covered many times before as the following video from mid February illustrates:

This despite the same clueless press earlier on in the year reporting on the likes of Japan implementing NEGATIVE interest rates in an attempt to PUSH the Japanese Yen LOWER as each nation in an attempt to boost domestic demand by means of importing inflation and exporting deflation in what is commonly termed as the CURRENCY WARS.

Therefore rather than the plunge in the British Pound being disastrous, instead Britain has effectively won a regional war in a raging global currency war all without implementing any panic monetary tools or economic policy, which is set against other central banks right across the western world from Switzerland to the whole Euro-zone block and Japan, repeatedly cutting their interest rates to below ZERO in panic attempts to push their currencies LOWER!

In terms of the outlook for sterling going forward, and the wider BrExit impact on financial markets, economy and geopolitics then see my forthcoming comprehensive video analysis set to be uploaded shortly.

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2016 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 25 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Housing Markets Forecast 2014-2018The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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