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BOE hikes up rates 75bp (highest hike in 30yr) and this is the result. Wtf is wrong with the pounds?
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Now that we know that Powell takes his job seriously, the USD is a pretty safe bet against inflation in your own country.
Pound getting pounded
“Hey Siri, play Rule Britannia on a kazoo”
Probably cause they did emergency QE and markets wanted more than on par with the fed.
The fact 75 BP is the highest in 30 years should tell you everything you need to know.
Poundtown
They’ve still gotta buy dollars to do international money stuffs.
It takes two values to make this ratio, the other being the USD. FED announced a 75 basis point hike as well so something else is at play here. Look into global financial currency depegging.
Brits at it again.
UK Government is inept. This is not demand-based inflation. Makes zero sense.
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Another huge problem in the UK is that almost everyone is on an adjustable rate mortgage and they are levered up 7-10x their income and they are all going to lose their shit.
Even my boss, who is firmly in the landed gentry, said, “If interest rates go any higher I’ll have to pull the kids out of boarding school.”
4% vs 3% which currency would you buy and hold?
GBP or USD?
The dollar is just the cleanest shirt in the laundry basket. It will follow all the other currencies into the void soon.
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Didnt they have lower rate increases earlier in the year? They’re trying to catch up with rate inceeasee but little too late….
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Wasnt it almost 1 to 1 a month ago?
My country is acting like it has an infinite money glitch.
It was the only way to avoid choas with Ed Miliband
More faith in other currencies, nothing much more wrong that wasn’t already wrong just less confidence
God save the king!
Dovish statement. Buy the rumor, sell the news
Their economy is very fragile and inflation is at 13% (?), so the market is probably pricing both hard recession and high inflation unlike usa where there is still the hope of avoiding both of them
They got a bunch of wankers running the country.
The world going to shit… but I’m not mad about it.
It’s like inception, a dream within a dream. Rate hike > stronger currency > weaker exports > weaker currency.
He said peak rate would be lower than current market expectations
BoE said terminal rate will be lower than currently priced in by the market. Basically they announced a pivot. Contrast this to mo-hawk Powel and this is what you get: pound gets pounded by the strong as.
You have to understand the relationship of other currencies to the dollar, they are hiking to prevent the pound from dumping even further. When the FED hikes, it strengthens the dollar, because it tightens financial conditions globally, because most debt and trade us conducted in dollars. It causes everyone’s debt to be more of a burden, which in turn makes every other country scramble for more dollars to pay their debts. There is a global dollar shortage, and everyone is competing to get those dollars.
So foreign nations sell their US treasuries to get mire dollars, which strengthens the dollar, and weakens their currency. They raise their rates to try and counter that effect. Otherwise their currency would spiral out of control even more.
It’s because the dollar also increased by 75bp. Why would international investors keep money in pounds when you could just hold dollars?
England has been in severe massive debt since the 1700’s, they created the role of Prime Minister for the guy that created a giant Ponzi scheme to convert government debts into a single debt. They still pay on this debt to this day. Short overview, but by 1800 the debt was two times the national GDP. [https://en.wikipedia.org/wiki/History_of_the_British_national_debt](https://en.wikipedia.org/wiki/History_of_the_British_national_debt)
TLDR: UK is a bunch of broke ass bitches.
The british pound has been overvalued for decades
>I’m sorry, I don’t understand what you’re trying to say.
Have you been paying no attention at all?
>Wtf is wrong with the pounds?
So fucking much my guy, that’s kind of a big question
Dollar milkshake theory. Everyone flocks to the safest currency.
Idk but I just flew to London so this vacation just got a lot cheaper