{"id":35280,"date":"2016-07-22T08:40:43","date_gmt":"2016-07-22T15:40:43","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=35280"},"modified":"2016-07-21T19:46:14","modified_gmt":"2016-07-22T02:46:14","slug":"the-british-pound-rises-from-the-edge-of-the-abyss","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2016\/07\/22\/the-british-pound-rises-from-the-edge-of-the-abyss\/","title":{"rendered":"The British Pound Rises from the Edge of the Abyss"},"content":{"rendered":"

(This is an excerpt from an article I originally published on Seeking Alpha on July 13, 2016. Click here to read the entire piece<\/a>.)<\/strong><\/p>\n

And so ends the flurry of sentiment on Brexit. The Google Trends chart makes “Brexit” look like a big anxiety bubble.<\/p>\n


\n
\"A<\/a>
A massive bubble in Brexit sentiment.<\/figcaption><\/figure>
\n
\"For<\/a>
For context, this is a view on the run-up in Brexit sentiment going into the EU referendum.<\/figcaption><\/figure>
\n<\/center><\/p>\n

While sentiment has calmed down, the British pound (FXB) is still coping with a post-Brexit aftermath. A common assessment says that the pound is destined for lower lows. Here is a highlight reel of some of the overhanging conclusions looming over the British pound:<\/p>\n

{snip}<\/p>\n

On July 6, Bloomberg reviewed analyst forecasts for the pound<\/a>. Of 62 analysts, 11 predict GBP\/USD will fall to at least $1.20 by the end of 2016. {snip}<\/p>\n

The most bearish predictions are looking for clues of a bottom along the extended history of decline for the British pound. {snip}<\/p>\n


\n
\"The<\/a>
The steady and persistent long-term slide of the British pound!<\/figcaption><\/figure>
\nSource: Bloomberg<\/a><\/strong>
\n<\/center><\/p>\n

Here is a summary of the pound’s downfall over time:<\/p>\n

{snip}<\/p>\n

What I like about trying to bet on some kind of crisis bottom in the pound is that so much sentiment seems to be about as negative as it can get. {snip}<\/p>\n


\n
\"The<\/a>
The CurrencyShares British Pound Sterling Trust (FXB) bounces smartly off the latest bottom.<\/figcaption><\/figure>
\nSource: FreeStockCharts.com<\/a><\/strong>
\n<\/center><\/p>\n

The rapid weakening of the Swiss franc (FXF) that I took as a sign of quickly receding Brexit concerns was apparently engineered by yet more currency intervention by the Swiss National Bank (SNB)<\/a>. {snip}<\/p>\n

{snip} Governor Mark Carney and company are trying to step into the breach of confidence. {snip}<\/p>\n

{snip}<\/p>\n

Note that one critic pointed to the BoE’s plans and claimed that Carney and company are actually weakening banks by allowing them to operate with less equity than previously planned<\/a>. {snip}<\/p>\n

Notably absent from Carney or the FPC’s remarks was an attempt to restore confidence in the pound or at least to give it a boost. {snip}<\/p>\n


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