Why is EUR weakening against GBP?
Discussion
JuanCarlosFandango said:
In very layman's terms, supply and demand. As to what is driving it I suspect a combination of the things you mention plus the European Central Bank printing more money and holding interest rates at 0 while the BoE has raised them slightly.
Yip not that I’m an expert. The question should probably be in the finance forum along with the cost of living thread query on why the BoE is raising interest rates. The UK seems to be following the Fed to avoid imported inflation vs the dollar which seems sensible to me for all I know. I haven’t paid enough attention to the EU but probably should as our payroll is in both EUR and GBP and most of our earnings are in dollars (US and CAD).
You should be ecstatic Lima, Brexit reversed the exorbitant climb that happened for the 5yrs prior.
As it happens, I’ve posted chapter and verse about this in the Euro thread over the years. The very simple bottom line is that not a single systemic factor which drove the previous rise to 1.45 has changed since the post Brexit reset in the rates. Ergo the rates were always going to see GBP rising against the EUR again.
Like you I also earned in EUR and had costs in GBP and I restructured the business at the start of this year to move away from that. I suspect that the end of 2022 will see the rate at 1.25. I personally think that the nature rate is around 1.2 and that anything much above that is too strong for the GBP.
As it happens, I’ve posted chapter and verse about this in the Euro thread over the years. The very simple bottom line is that not a single systemic factor which drove the previous rise to 1.45 has changed since the post Brexit reset in the rates. Ergo the rates were always going to see GBP rising against the EUR again.
Like you I also earned in EUR and had costs in GBP and I restructured the business at the start of this year to move away from that. I suspect that the end of 2022 will see the rate at 1.25. I personally think that the nature rate is around 1.2 and that anything much above that is too strong for the GBP.
LimaDelta said:
DeejRC said:
You should be ecstatic Lima, Brexit reversed the exorbitant climb that happened for the 5yrs prior.
It certainly did, at least, the fear of what might happen seemed to be priced in. The fact that none of that materialised now looks to be showing in the rate.JuanCarlosFandango said:
In very layman's terms, supply and demand. As to what is driving it I suspect a combination of the things you mention plus the European Central Bank printing more money and holding interest rates at 0 while the BoE has raised them slightly.
ECB rate is negative. -0.5%. Not 0.roger.mellie said:
LimaDelta said:
DeejRC said:
You should be ecstatic Lima, Brexit reversed the exorbitant climb that happened for the 5yrs prior.
It certainly did, at least, the fear of what might happen seemed to be priced in. The fact that none of that materialised now looks to be showing in the rate.Its called understanding money. I make no claim to being able to understand, or even know, finance - in the technical aspects - as Stongle does, but understanding money, especially when you have multiple streams in different currencies, is utterly fundamental to being able to run a cross border business and life.
Its why I get irked by those who don't do any of the above, but feel they can preach at those of us who do about how it all works.
DeejRC said:
Roger...why do you think almost every single working (British) ex pat I know of voted for Brexit?
Its called understanding money. I make no claim to being able to understand, or even know, finance - in the technical aspects - as Stongle does, but understanding money, especially when you have multiple streams in different currencies, is utterly fundamental to being able to run a cross border business and life.
Its why I get irked by those who don't do any of the above, but feel they can preach at those of us who do about how it all works.
Cos they were idiots? Joking but I could tell you a tale about ex pats not knowing what way their bread was buttered. I know you likely know more than me on that. I like playing the fool and understand a bit more about money or exchange rates than I was letting on but I'll never claim to be an expert and have had my fingers burned. As said I'm mostly concerned about the US and CAD exchange rate these days, the dumbass me that pegged his pay in the wrong currency at the wrong time is still a dumbass but I can live with that shame Its called understanding money. I make no claim to being able to understand, or even know, finance - in the technical aspects - as Stongle does, but understanding money, especially when you have multiple streams in different currencies, is utterly fundamental to being able to run a cross border business and life.
Its why I get irked by those who don't do any of the above, but feel they can preach at those of us who do about how it all works.
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