Dramatic Change in Currency Market Due to British Vote

[Go-Bucks!]

Bought my pounds and euros yesterday for an upcoming BI cruise in 5 weeks. Was hoping for a better discount since the Brexit vote, but really only saved $46, about 3.5%. :rolleyes:

 

The media, who sensationalize everything, made it sound like the world economy was ready to collapse. Sheesh.

[RDC1]

Exactly. I spent a lot of time in the UK about a year ago. (2014-2015) The exchange rate that I was actually getting (similar but not identical to that posted on line) ranged from $1.40 - $1.51. While I'm not there now to address the actual rate my bank offers' date=' the rates I'm seeing on line are $1.35-$1.40 OK, a little lower, but not the panic rates people are discussing.[/quote']

 

Keep in mind that a 1% change in a currency in one day is a very very large move. The pound ended up 7% down after bouncing off a 30 year low earlier in the day. For currencies 7% in one day is a panic response.

[satxdiver]

Bought my pounds and euros yesterday for an upcoming BI cruise in 5 weeks. Was hoping for a better discount since the Brexit vote, but really only saved $46, about 3.5%. :rolleyes:

 

The media, who sensationalize everything, made it sound like the world economy was ready to collapse. Sheesh.

 

The GBP is considered a rock solid currency about equal to the USD in stability that varies very little over time. Many in less stable countries tend to have their savings in GBP, Euros or USD. This protects them from large fluctuations in their own currency. So when the historically stable GBP dropped on Friday to a level not seen since the middle 1980's there was world wide panic. Imagine you had your investments and savings in GBP on Friday and saw them drop in value, you would panic as well.

[RDC1]

The GBP is considered a rock solid currency about equal to the USD in stability that varies very little over time. Many in less stable countries tend to have their savings in GBP, Euros or USD. This protects them from large fluctuations in their own currency. So when the historically stable GBP dropped on Friday to a level not seen since the middle 1980's there was world wide panic. Imagine you had your investments and savings in GBP on Friday and saw them drop in value, you would panic as well.

 

The only time you had this large of a single day drop in GBP in the last 10 years was during 2008, during the financial crisis when no one knew what was going to happen and everyone was in a panic.

[Go-Bucks!]

The GBP is considered a rock solid currency about equal to the USD in stability that varies very little over time. Many in less stable countries tend to have their savings in GBP, Euros or USD. This protects them from large fluctuations in their own currency. So when the historically stable GBP dropped on Friday to a level not seen since the middle 1980's there was world wide panic. Imagine you had your investments and savings in GBP on Friday and saw them drop in value, you would panic as well.

 

 

You didn't need to write your comment with the patronizing attitude that I don't understand what's going on. Far from it. :rolleyes:

 

I lost half of my 401K value in the 2008-2009 recession, but did not panic. I stayed the course and did not change any of my investments because I knew they were solid and that "this too shall pass." Then in March, 2010 I was one of the lucky folks who benefited from the sharp and fast equities rebound! Those who had switched to cash investments lost out on the rebound.

 

What I was saying is that the media portrays events in a negative and fearful way. This is not necessary and no one needs to panic.

[mamkmm2]

Keep in mind that a 1% change in a currency in one day is a very very large move. The pound ended up 7% down after bouncing off a 30 year low earlier in the day. For currencies 7% in one day is a panic response.

 

And the "panic response" of the day trader types still didn't manage to move it very far or for very long. It was little more than a blip, certainly not the crash that was predicted. Or more precisely what they hoped for. The globalists are the ones that are panicking.

Edited June 27, 2016 by mamkmm2

[cactusrose]

People are not cheating the waiters. It is Princess who are cheating them if they are not paying them a living wage.

 

OK, let's say Princess raises the fare to include the tips and does pay them a living wage. That means Princess will be paying more in taxes because now it's included in their income and the wage earner will be paying more in taxes and more to their agent. That means the price will not just go up by the amount of the tips it will go up to include the extra taxes Princess pays and the crew will take home less than they do now. Net effect, everyone loses.

[cactusrose]

I honestly haven't seen anything that people call "dramatic" or "historic lows." It seems news is making more of it than it actually is. The exchange rate really isn't off that much from what it was a couple of months ago when I started planning my UK trip. Certainly isn't helping all that much when it comes to exchanging currency. At best $25 US per block of 500 GBPs. While that is indeed something it isn't the big fracking deal the news core's drama queens tried to make it out to be.

 

You're looking at this only from the standpoint of the guy who is traveling and only losing a few bucks but if you are a large corporation getting paid in a currency that is now 11% lower it is a big fracking deal. That lose will trickle down in the form of lower earning for the company which will effect their stock price and maybe the dividends they can pay. Lower earnings means their will probably be layoffs which will mean less spending impacting large and small business. It becomes a vicious circle and will have a severe impact on the global economy. So yes, it is a big fracking deal.

[mamkmm2]

You're looking at this only from the standpoint of the guy who is traveling and only losing a few bucks but if you are a large corporation getting paid in a currency that is now 11% lower it is a big fracking deal. That lose will trickle down in the form of lower earning for the company which will effect their stock price and maybe the dividends they can pay. Lower earnings means their will probably be layoffs which will mean less spending impacting large and small business. It becomes a vicious circle and will have a severe impact on the global economy. So yes, it is a big fracking deal.

 

You are still only a few pennies one way or the other. Eleven percent sounds like a big move ... but it is pennies on the dollar/pound. Any company that cannot absorb that relatively small a movement in one direction or the other has bigger problems than currency movements; especially given the reported cash that businesses are holding onto. The reality is that currency exchange rates move every day. They don't usually move five cents in a single day but that isn't unheard of.

 

Right now the problem is volatility. Until it settles out everyone is scrambling and behaving nervous.

 

We own our own business so I'm aware of the complications. But complications are why you are careful with your assets.

[cactusrose]

You are still only a few pennies one way or the other. Eleven percent sounds like a big move ... but it is pennies on the dollar/pound. Any company that cannot absorb that relatively small a movement in one direction or the other has bigger problems than currency movements; especially given the reported cash that businesses are holding onto. The reality is that currency exchange rates move every day. They don't usually move five cents in a single day but that isn't unheard of.

 

Right now the problem is volatility. Until it settles out everyone is scrambling and behaving nervous.

 

We own our own business so I'm aware of the complications. But complications are why you are careful with your assets.

 

Didn't say business couldn't absorb it, just pointing out that it's a bigger issue than the traveler buying some OBC and only losing a few dollars or pounds. It may seem like pennies to you but if you're a company doing a billion dollars off shore, it's no longer pennies. It's just simple economics. Large moves in currencies or markets impact all of us in many unseen ways. Time will tell but right now the pounds is still going down.

Edited June 27, 2016 by cactusrose

[MicCanberra]

OK, let's say Princess raises the fare to include the tips and does pay them a living wage. That means Princess will be paying more in taxes because now it's included in their income and the wage earner will be paying more in taxes and more to their agent. That means the price will not just go up by the amount of the tips it will go up to include the extra taxes Princess pays and the crew will take home less than they do now. Net effect, everyone loses.

 

Paying taxes would be good, more money to pay for services like health and education and pensions for the aged or veterans.

[caribill]

Paying taxes would be good, more money to pay for services like health and education and pensions for the aged or veterans.

 

Glad to hear that in Australia taxes are only used for worthwhile purposes.

 

Wish it were that way in the USA.

[MicCanberra]

Glad to hear that in Australia taxes are only used for worthwhile purposes.

 

Wish it were that way in the USA.

 

Me too.:D

[antsp]

That statement is total BS. Unless your last experience in the US was 1968.

 

Sorry, the official US website listing minimum wage must be wrong, silly me for believing official websites

[mamkmm2]

Sorry, the official US website listing minimum wage must be wrong, silly me for believing official websites

 

 

You just missed the exceptions, and there are exceptions. There are various levels of minimum wage just like there are different laws for salaried vs hourly employees.

[RDC1]

You are still only a few pennies one way or the other. Eleven percent sounds like a big move ... but it is pennies on the dollar/pound. Any company that cannot absorb that relatively small a movement in one direction or the other has bigger problems than currency movements; especially given the reported cash that businesses are holding onto. The reality is that currency exchange rates move every day. They don't usually move five cents in a single day but that isn't unheard of.

 

Right now the problem is volatility. Until it settles out everyone is scrambling and behaving nervous.

 

We own our own business so I'm aware of the complications. But complications are why you are careful with your assets.

 

They are very rare and companies go bankrupt when they do. The normal movement for currencies in a day is in the tenths of a percent, not whole percentage points.

 

The last major change of this magnitude was when the Swiss allowed the Franc to float last year. It dropped 15 cents in one day. A few financial companies ended up bankrupt as a result when they were caught on the wrong side of the trade.

 

The last time the GBP moved this much in a day was in 2008 during the peak of the financial crises.

 

The slide is continuing with another 3.5% drop today as of 8:30PST.

 

Stock behavior is also interesting. Some travel companies, such as Easyjet got hit 35% this morning when they have stated that they summer bookings are being impacted. I guess they cannot handle the small change of around 10% so far (which happens to be greater then their profit margin)

 

It is certainly not a business as usual situation. It will be interesting to see how this plays out, because it is unique. The first time a major economy has pulled out of a major trading block. It will have the characteristics of both a point black swan event, such as the Japanese earthquake or the US debt limit crisis, as well as the uncertainty over the drawn out negotiations over the actual withdrawal. Another impact to watch will be the actions of other EU countries and see if others follow.

 

I am not selling stocks in this situation. However, I am also not in a hurry to buy either stock or currency. During a normal point black swan event it takes about 30 days for the market to bottom.

 

One major area of impact on US companies, once the UK withdraws, is EU policy in privacy and competition. The UK has been a moderating influence on the EU policy concerning actions against US tech companies. Once they are gone, EU policies may result in more action against them.

Edited June 27, 2016 by RDC1

[Kenswing]

S&P just downgraded UK's credit rating.. Let the fun begin.. :(

[tracie17]

I have purchased some US$ for my forthcoming Baltic cruise. Am I able to lodge them at the desk against my cruise account?

[majortom10]

Today in the UK the US$ hit a 31 year low and is expected to fall further in the days to come and having Americans gloating how much UK Sterling they are getting in exchange for their US$ is not helpful and hopefully I will not meet any on my forthcoming British Isles cruise or else there could be interesting conversations.

[crows nest club]

Today in the UK the US$ hit a 31 year low and is expected to fall further in the days to come and having Americans gloating how much UK Sterling they are getting in exchange for their US$ is not helpful and hopefully I will not meet any on my forthcoming British Isles cruise or else there could be interesting conversations.

 

I think time is now right for us to gift ourselves on board credit for our August cruise on the Emerald. Princess are giving $1.428 against a High Street rate of $1.28 today. We cannot see it rising too much in the short term. Anybody who booked last year is locked on a rate of $1.53 which must be a no brainer for them.

[capriccio]

Today in the UK the US$ hit a 31 year low and is expected to fall further in the days to come and having Americans gloating how much UK Sterling they are getting in exchange for their US$ is not helpful and hopefully I will not meet any on my forthcoming British Isles cruise or else there could be interesting conversations.

 

I hope no one gloats over the current difficulties facing UK citizens but I would be more concerned that you will encounter people (not just from the US) upset over the effects of the Brexit vote on world markets and their personal investments.

[Suzez]

This is an interesting thread. I am going to see what OBC I can buy for out cruise next April.

 

Is it worth pre paying our gratuities? If so , how would I go about doing this please?

[caber]

This is an interesting thread. I am going to see what OBC I can buy for out cruise next April.

 

Is it worth pre paying our gratuities? If so , how would I go about doing this please?

 

We have prepaid ours. It worked out slightly less than paying them daily. You can do this on your cruise personaliser. With what is happening just now you will be getting an even better deal I would think. We have also just put some OBC on our account. I phoned Princess UK to see what rate we would get. I think it relies on when you actually booked the cruise. You should get it at the rate then. It is bound to beat the high street rates at the moment but maybe the pound will recover before your cruise.

Edited June 27, 2016 by caber

[crows nest club]

This is an interesting thread. I am going to see what OBC I can buy for out cruise next April.

 

Is it worth pre paying our gratuities? If so , how would I go about doing this please?

 

To buy some obc for your cruise, go into cruise personilizer - on board reservations - buy credits. The three sterling amounts quoted will be for $25, $50 and $100 respectively. From the amounts, you can calculate the $ amount being given. To pre-pay gratuities, go into payments and credits from the Personalizer and here again the sterling amounts for each passenger are quoted.

 

Hope this helps.

[Suzez]

We have prepaid ours. It worked out slightly less than paying them daily. You can do this on your cruise personaliser. With what is happening just now you will be getting an even better deal I would think. We have also just put some OBC on our account. I phoned Princess UK to see what rate we would get. I think it relies on when you actually booked the cruise. You should get it at the rate then. It is bound to beat the high street rates at the moment but maybe the pound will recover before your cruise.

 

Thank you for your speedy response. I have looked on our personaliser and see how to pay the gratuities, which we will do.

 

 

OBC is showing £65 but It does not say what you get for that. Which is my concern.