NDd and Marketwatch
(Dan here) Quoted is a summary and link to New Deal democrat‘s post at XE.com on the pound sterling and Brexit impacting the US economy via Marketwatch:
The pound plunged early Friday as results from the U.K.’s referendum hit, but “since then the pound has gone sideways,” notes financial blogger New Deal Democrat in a post at XE.com.
“While the bottom isn’t necessarily in, barring new and worse developments out of Europe, I would expect the pound in the next few months to fluctuate about its value at the bottom Friday morning,” the blogger writes.
Any big Brexit-related damage to the U.K. currency has already happened, New Deal Democrat argues. It didn’t happen over three months to a year, but on that single Friday — “everybody” knew sterling was in trouble and decided to sell.
This call helps make the blogger upbeat on the U.S. economy, playing down fears about the almighty dollar hampering growth.
“While a strengthened US$ is a headwind, the lower interest rates that this year’s annual Europanic is bringing are a boon,” the XE.com post says. “I continue to see Brexit as ‘a fire across the river’ that should not have more than a minor effect on the U.S. economy.”
Go here to read the full post.
You pays your money and take your choices.
I have a quite different view.
Brexit will just be another factor contributing to world economic stagnation. It will significantly increase uncertainty that will feed through
to weaker capital spending by corporation and the strong dollar will dampen both US growth and inflation
In the short run the plunge in the pound just might more than offset the negative impact of Brexit on the UK economy so that over the next year or two the UK economy could actually improve. Of course trade will first cause the “J ” curve impact where a devaluation first harms the trade balance before the positive impacts appear.