Brexit and the currency speculators
Business Daily
BBC
4.4 • 816 Ratings
🗓️ 30 September 2019
⏱️ 19 minutes
🧾️ Download transcript
Summary
Some traders are betting on the UK crashing out of the EU without a divorce agreement. Should we be concerned that they wield too much political influence?
Both the British Prime Minister's sister Rachel Johnson, and the former Conservative finance minister Philip Hammond, have publicly voiced concerns in recent day that Boris Johnson is backed by financiers speculating on a sharp fall in the pound following a possible no-deal Brexit on 31 October.
Manuela Saragosa asks how credible are such claims? How are the markets positioned for Brexit? And is there any way of even knowing who is "shorting" the pound, ready to profit from an unexpected fall in its value?
The programme includes interviews with David Riley, chief investment strategist at Bluebay Asset Management, and with Jane Foley, head of currency strategy at Rabobank. Plus the BBC's Edwin Lane learns how to play the foreign exchange markets from Piers Curran of Amplify Trading.
Producer: Laurence Knight
(Picture: A woman looks at a chart showing the drop in the pound against the dollar after the UK vote to leave the EU in 2016; Credit: Daniel Sorabji/AFP/Getty Images)
Transcript
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| 0:00.0 | Hello, I'm Manuela Saragossa and this is Business Daily from the BBC. |
| 0:05.9 | Coming up, is the Brexit debacle in the UK an open invitation to speculate on the British pound? |
| 0:12.6 | There really is a real strong betting element. |
| 0:16.3 | So from that point of view, it is quite possible that we are getting speculators in. |
| 0:20.4 | And why those who may be speculating on the pound are so hard to identify. |
| 0:25.3 | Currency markets are very large, very liquid. |
| 0:28.9 | So the statistics capture a relatively small part of all of those trades, of which there's |
| 0:35.7 | hundreds of millions of pounds every day. |
| 0:38.7 | That's all here in Business Daily from the BBC. |
| 0:45.6 | There's a theory that's been doing the rounds online and on social media, |
| 0:50.0 | and it goes like this, that there's a cabal of people set to profit financially from the UK leaving the European Union without a deal. |
| 0:58.7 | How? Well, by betting that the British pound will fall sharply in value if Prime Minister Boris Johnson follows through on his pledge to Brexit on October the 31st this year, come what may. |
| 1:11.1 | A hard Brexit, as it's been called. |
| 1:13.2 | Some say it's just a conspiracy theory. |
| 1:16.1 | So imagine the surprise, the shock even, |
| 1:19.1 | when the Prime Minister's sister, Rachel Johnson, |
| 1:22.2 | went on BBC National Radio late last week, |
| 1:25.2 | criticising what she described as her brother's aggressive position on Brexit and questioning his motives. |
| 1:31.9 | It could be Dominic Cummings advising the Prime Minister to be extremely aggressive and to face down opposition from all sides of the establishment |
| 1:43.1 | in order to, as it were, secure his position as the |
| 1:46.7 | tribune of the people. It could be coming from my brother himself. He obviously thoroughly enjoys |
| 1:54.6 | being Prime Minister. It also could be from, who knows, people who have invested billions in shorting the pound or shorting the country in the expectation of a no-deal Brexit. |
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