The British Pound is 3.9 percent of the CFETS RMB basket.
A lot of analysts and economists are blaming this drop on Brexit and it is a proximate cause because it has broken the post-2008 equilibrium. That equilibrium only existed as long as central banks and governments could tightly control the economy. For years now, I expected to see this chart, and see it repeated in euros, Canadian dollars, Chinese yuan, Australian dollars and eventually yen. As I expected with the United States, the trigger was not economic, but political. British voters had enough and voted to change the rules. Although the polls show Trump far behind Clinton at this late date, the zeitgeist still favors a Trump win. And if the U.S. doesn't revolt this year, there's Italy's referendum in December, plus German and French elections in 2017.

No comments:

Post a Comment