GBP and EUR v USD over last 10 years

[odysseus2000]

I was being told that the £ has crashed ever since Brexit and it is down 27% from its 2014 peak:

https://twitter.com/0_ody/status/153464 ... nvilTZoZNw

but the Euro has not done much better, down 23% since its 2014 peak:

https://twitter.com/0_ody/status/153464 ... nvilTZoZNw

One of the oft cited reasons for weakness of European currencies is the debt of most major European nations (Germany excluded) but this argument makes no sense given the US debt

The strength of $ imho is a likely reflection of the power of the US economy and its ability to grow and the inverse in Europe with our own chancellor expecting very weak growth and seemingly uninterested in doing anything to increase growth.

Are there other reasons that I should pay attention to?

Regards,

[GrahamPlatt]

Those numbers would seem to imply that the £ has fallen <4% vs the € since 2014. Really?

[scrumpyjack]

I was being told that the £ has crashed ever since Brexit and it is down 27% from its 2014 peak:

https://twitter.com/0_ody/status/153464 ... nvilTZoZNw

but the Euro has not done much better, down 23% since its 2014 peak:

https://twitter.com/0_ody/status/153464 ... nvilTZoZNw

One of the oft cited reasons for weakness of European currencies is the debt of most major European nations (Germany excluded) but this argument makes no sense given the US debt

The strength of $ imho is a likely reflection of the power of the US economy and its ability to grow and the inverse in Europe with our own chancellor expecting very weak growth and seemingly uninterested in doing anything to increase growth.

Are there other reasons that I should pay attention to?

Regards,

The size of the US economy, and the fact that it is the main reserve currency in which other countries hold their reserves, mean that whenever there is instability or fear in the world, holding USD is the 'flight to safety'. That, it is often said, is why it rises at such times against other currencies.

[Lootman]

The strength of $ imho is a likely reflection of the power of the US economy and its ability to grow and the inverse in Europe with our own chancellor expecting very weak growth and seemingly uninterested in doing anything to increase growth.

Are there other reasons that I should pay attention to?

Part of it is certainly that the US economy is typically faster growing then Europe. Back in the 1980s you saw the same thing with the Japanese currency when Japan's economy was leading the world, until it wasn't of course.

But another factor is that the US currency is a "must have" safe haven during bad times, not least because US Treasuries are held in high regard during difficult times.

So you can experience a strong USD in both good times and in bad times.

Swiss francs have historically been very strong as well, although the yield on CHF instruments has been negative for as long as I can remember. Whereas US debt instruments have a decent yield.

[odysseus2000]

Those numbers would seem to imply that the £ has fallen <4% vs the € since 2014. Really?

Do you think the charts or wrong or I have got my arithmetic wrong?

Regards,

[murraypaul]

Those numbers would seem to imply that the £ has fallen <4% vs the € since 2014. Really?

Do you think the charts or wrong or I have got my arithmetic wrong?

From a quick look, the Pound was around the current level vs the Euro in 2013, rising through ~1.2 in January 2014 to around 1.4 March 2015, stayed high until the end of December 2015, dropped back to less than the current level July 2016 and has been bouncing around between 1.1 and 1.2 most of the time since.

https://www.xe.com/currencycharts/?from ... R&view=10Y

[odysseus2000]

The currency pairs i looked at were against the US $, not the Euro to £ ratios.

Regards,

[odysseus2000]

Just for completeness, here is the charge of GBP v Euro, essentially what was posted by murraypaul:

https://twitter.com/0_ody/status/153491 ... JsF_xAzP2g

What ever the UK is exporting should sell well into Europe after this decline, but there are various political barriers that are hurting some uk industries like sea-foods and at the same time hurting UK consumers who want to buy stuff made in Europe.

If the politicians could get there act together and get more uk manufacturing, or bring in external manufactures they should be able to undercut European makers just on currency alone, if raw materials are sourced in $, clearly buying raw materials from Europe would not be advantageous.

Regards,