Euro falls in value due to Brexit
Now that Brexit is a fact, this may also have consequences for tourists and expats in Thailand. The Euro fell as news trickled in from the UK.
As it became clear last night that the British are going to leave the EU, the pound was dumped en masse. Against the dollar, the currency reached its lowest rate in 31 years. A pound now costs $ 1,34, a decrease of more than 10 percent. Earlier tonight, when the markets still assumed that the British would stay in the EU, the rate was at 1,50. The euro also fell in value, which was quoted this morning at 1,09 against the dollar, yesterday it was 1,14.
In Asia, a number of stock exchanges are still open and there the signs turned deep red halfway through the night. In Tokyo, the Nikkei closed with an 8 percent loss. Prices are also falling in Hong Kong and China. Investors are in great uncertainty and are dumping their shares. Gold is seen as a safe haven and is rising in value.
The financial markets seem totally surprised because yesterday investors still assumed that the British would remain within the European Union. The pound rose and stock markets rose. The AEX gained 8 percent last week.
Stock markets in Europe are preparing for a black day as Britain leaves the European Union.
Source: NOS.nl
Don't get too gloomy. If all goes well, most will have received their state pension and pensions just before the decline.
And now we have another month for the euro to rise again .
Really, take it from me that all the doom thinking about Brexit will not be too bad. This was just scare tactics. And the market will recover itself!
Don't get gloomy, unless of course you just want to extend your stay in Thailand by a year based on your AOW (plus small pension) and the new exchange rate.
The market always recovers. The question is at whose expense. Usually those who can afford it the least. Those who have enough capital will certainly benefit.
harold,
There is indeed nothing wrong at all, if you look at the currency position of the British Pound, it was LOWER 3 months ago than now, the currency traders had chased it, with the elections coming up, and it now falls back into the basket in which he belongs.
Monday everything is true as normal and in October when Cameron resigns (which I doubt) everyone will have long forgotten about the vote. Officials just keep going and don't listen to the people anyway.
yes look at the positive side. The Thai baht is increasing in value and that is good for those who have a lot of it ... In addition, Thailand also benefits from it because it exports a lot and therefore receives more foreign currency, in the short term.
In addition, a higher exchange rate for the baht creates a higher barrier to living here. So fewer of those minimum pensionados from EU countries and the UK.
It just depends on which side you look at it from.
I indeed saw that this morning the Euro 1 Baht is worth less. For example, if you live on 1000 Euros per month in Thailand, you will have about 1000 Baht less to spend per month, but if it stays that way, people will soon get used to it. But hope that the consequences will not be greater. England still had their pound sterling. If Geert Wilders gets his referendum and the Netherlands does indeed and perhaps rightly leave the EU, then there will be more to it. What the consequences will be if we go back to the Gulden, that is a very big question mark.
Fallen..., but not as dramatically as the UK pound, we have more to fear from Mario Draghi who is ready with his scissors every time the euro goes up again to give it a cut...
As long as it remains at 1 Baht more or less per Euro, that falls within the usual fluctuations, and I am not so afraid of the Euro, in the context of a Brexit. But no one can predict, and if everyone agrees, you have to be extra careful. Do you remember over a year ago? All experts were in complete agreement, the parity between Euro and US Dollar would definitely be reached before the end of the year…
The big question that Brexit now raises is how the other EU countries will arrange the 'divorce' with the UK.
If the UK 'gets away well' the economic consequences will be limited, but the next question arises: Who's next? We want to prevent that.
And if the UK is pinched off, the economic consequences for both the UK and the EU will be much greater. We don't want that either.
All in all, there will be increased uncertainty in the coming years, and that is never good.
On the one hand it is almost unbelievable that a majority would consciously want to plunge into such uncertainty, on the other hand it was inevitable that the borderless transfer of national competences to a European institution, which cannot withstand the test of a modern democracy, would one day lead to massive resistance.
If we do not quickly follow England, we, the Netherlands, will really be screwed within the Euro, without England we will lose much more within Europe, I wonder what will remain of our pension if Rutte remains firmly in favor of the Euro, hopefully we can quickly spend guilders again, if there is a sheep over the dam….
The Netherlands depends on services for almost 75% of its income, which are mainly internationally oriented, so I think a transition to the guilder will be much more negative than expected. In addition, today's economy is significantly different than it was back then. The exchange rate of the euro will be under pressure in the near future because the uncertainty surrounding the transition of GB's status is still unclear. The pension funds in the Netherlands have already lost an average of 3% of their value due to the choice of the British and this will probably also be the case in other countries. This will also affect the exchange rate of the euro because people who build up a pension or enjoy their pension will pay more or receive less, which means they can spend less, which in turn will put pressure on the exchange rate. Hopefully it will become clear in the near future whether the damage can be limited and whether the Euro THB price will not suffer too great a blow.
The UK is expected to lose about 8% on an annualized basis this year.
It will take at least two years for the UK to leave the EU permanently. The Treaty with the EU sets out the rules for what to do if a country wishes to leave the EU. Basically, those are negotiations about anything and everything. The UK will enter negotiations with hat in hand. Because 27 countries will ensure that the UK will not get any commitment.
Because after the two years it will take five to ten years before an arrangement with the UK is on the table. Scotland will secede from the United Kingdom and the nationalists in Northern Ireland will also move towards unification with Ireland.
Northern Ireland is doubly affected by the exit from the EU. Due to the disappearance of shipbuilding, new jobs were created with subsidies from the EU, billions of euros. Those subsidies are now gone.
The euro will soon recover, but if the financial markets continue to perform poorly, you will notice this later in your pension(s).
The Netherlands will probably lose 17 billion if the UK leaves the EU.
What has Engelenad won now? Nothing but a lot of uncertainty really. There are indeed countries such as Switzerland and Norway that do not belong to the EU, but do trade fully within the EU and are prosperous. But what is very rarely mentioned is 1. that these countries had to approve and comply with almost all treaties from within the EU in order to trade within the EU, without them having a say about it and 2. that those countries also make contributions to the EU, without being able to draw subsidies from Europe themselves. The same fate will befall GB. But the NO camp constantly forgot to mention that in its campaign.
The elderly and people with a low level of education have mainly voted for a Brexit because they know too little about it. Young people and people with some education voted YES.
If the Netherlands leaves the euro, we will receive 25 baht for our guilder, because then the guilder will become much stronger than the euro.
Only when converting, we will probably only get 1,8 guilders for a Euro instead of 2,2 Euro.
Just as we have bottled up with the conversion to the Euro.
Sheer nonsense. Unless the €uro 1=1 has been converted into Hfl.
The NL Gulden, Florin or whatever-they are called, will become a very small, exotic currency, unless… like the Scandinavian Kroner, linked to the Euro.
Look at Thai exports: in US$, sometimes in Yen and Euro, but almost never in THB.
Asset traders will not easily dive into such a “local shell”, because it is much too difficult to get out quickly in case of problems / to trade badly, so .. higher interest will be demanded, just like now in the Scandinavian countries .
So: Wilders argument: not hindered at all by the slightest economic knowledge.
….I hear higher interest rates, writes Harrybr,
but that is good news for all those who are building up a pension. And what is so wrong with strong currencies such as the Swiss franc or Singapore currency. Previously we also had a strong currency and an economy that was running well, so it will of course also be possible with our own NL currency.
And what you call a local shell is one of the better economies in Europe. Together with Germany and a number of other countries, it was easy to trade for the euro and it will continue to be so. Our country is a trading country and that foundation will not really change, or with its own currency our economy will continue.
Sorry, but that's really nonsense. I wonder who is hindered by any economic knowledge? And, Scandinavian crowns??
The problem in the Scandinavian countries is that the currency simply became too strong. Norway has in recent years first had to follow the EU with interest rate cuts simply to devalue their own currency, which became much too strong due to, among other things, oil exports. Now that the oil price has also fallen sharply, you suddenly see that the Norwegian Krone is also worth much less. The Norwegian Krone is therefore absolutely not linked to the Euro.
Denmark also has a currency that is linked to the euro, but there too the question is how long they can keep it up, after all, you cannot devalue your currency forever. As far as I know, Denmark was the first in Europe to have negative interest rates. The question is not if but when they will let go of that currency peg.
An asset manager seeks stable income with little volatility. So if they invest in a certain currency (for example by buying government bonds from a certain country), they will benefit from a strong currency and a stable policy. And those guys are not looking to liquidate their entire position in a very short time either.
A currency trader benefits from higher volatility. He may want to get rid of his currency quickly, but he should also take this into account with his position. And the extent to which he takes this into account has a lot to do with demand, if a small country still has a thriving trade, then there is a lot of demand for that currency and it is not a problem. A currency trader is usually only speculative anyway, so you may wonder to what extent this serves the interests of a country.
Moderator: No anti or pro Europe discussion please. The article is about the exchange rate of the Euro, so the comments should be about that.
Joost wrote: “If the Netherlands leaves the euro, we will receive 25 baht for our guilder because then the guilder will become much stronger than the euro”. I'm not a specialist. I suspect you don't make this up either. Which experts do you rely on to make this claim? I read completely different predictions regarding the Pound in recent days. And apparently they are correct.
The Euro is now so low because Mario keeps the Euro artificially low. This is necessary for the southern states. The Northern states prevent a complete collapse of the Euro. The Netherlands also belongs to these states. You can already see it in the interest we pay on our national debt. The Pound has remained an independent currency. It is falling because London is the financial centre. So with this Brexit it loses its financial status and the pound goes back to normal.
That is “The race to zero”.
Almost all of the West is devaluing their currencies because of their exports. And China too.
The game of keeping the currency low has been played longer by Britain than by the rest of Europe. Great Britain, among other things, started buying up government debt much earlier in order to devalue their currency.
And as for the fall in the rate of the baht (so far by 1 baht, so to speak), that has been worse in the recent past, for example when Draghi announced that he would buy bonds on a large scale!
The Euro even dropped to Baht 36 for a Euro, BUT then everything was a lot cheaper in Thailand. If this were to happen now, I don't know how many people would be screwed with the current prices. Me too and then have to go back to NL with hanging legs.