Quote:
Originally Posted by nomadking
If instead of the Remain side saying that Sterling would fall, they said it would rise, then it would rise, instead of fall.
The markets follow the prediction, NOTHING ELSE. If the prediction is that it will fall, then they have to sell as quickly as they can to get the best price. Guess what happens when they sell? The price of Sterling goes down making it FALSELY look as though the prediction was right. It was the ANTICIPATION of a fall that created the fall. Not only that, but once the price has bottomed out, they can buy back Sterling at a LOWER price, thereby ending up with MORE money than they started out with.
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Sterling is not Bitcoin.
If this were true that sterling would have eventually recovered in the two years following the vote as people would think the underlying value of the currency is stronger than the speculators think. It didn't.
Speculation is only part of what drives currency and stock markets. There are other types of investors who make longer term bets and valuations of what they're buying. The currency market itself is also driven by the performance of the underlying economy and the companies within it, the economic policies of the central bank/government in charge of it and the confidence people have in the stability of the government.
It's hard to precisely value a currency, people a look more experienced than us find it hard to do, but it's just not
all random speculation. Some of it is but those people do short term bets.