It looks like the GBP has been in decline for years.
Here's the last 10 years: http://www.xe.com/currencycharts/?from=GBP&to=USD&view=10Y
Apple’s UK App Store prices will rise 25% following Brexit currency fluctuations
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Re: Apple’s UK App Store prices will rise 25% following Brexit currency fluctuations
#52Eurozone debt-to-GDP: 92%. This is BEFORE one considers (a) member country debt, (b) troubled bank liabilities which EU must backstop (eg. Deutchebank), and (c) immense social, security and defense costs which EU nations must incur due to recent global events. By contrast UK debt-to-GDP: 90% and falling, and a US-UK trade deal is likely very soon. I'd rather own Sterling.
Source? Everything I can find says that it is still rising, including several newspaper articles late 2016, but the only data I can find runs up to 2015, including the automatic google-chart: https://www.google.co.uk/publicdata/explore?ds=ds22a34krhq5p... Which has UK increasing, and Germany and the EU decreasing. > and a US-UK trade deal is likely very soon. Again, source for this, other than magical wishful-thinkin…
it will be all but signed, ready to go on the first day
there's very little the EU can do to stop it
Re: Apple’s UK App Store prices will rise 25% following Brexit currency fluctuations
#53"While critics might note that Apple’s price increase is greater than the pound’s loss in value, financial analysts predict that the market still hasn’t fully priced in the cost of Brexit — that is to say the pound still has further to fall." So what mechanisms keep the price from instantly dropping if "everyone" agrees it should be lower? Market inefficiencies? Or lots of money betting on an upswing?
> "While critics might note that Apple’s price increase is greater than the pound’s loss in value, financial analysts predict that the market still hasn’t fully priced in the cost of Brexit — that is to say the pound still has further to fall." Someone should probably tell the worlds biggest futures exchange that their forward rate for GBPUSD is wrong then: http://www.cmegroup.com/trading/fx/g10/british-pound.html Me…
Not necessarily - the market has priced in multiple future outcomes according to their probability, each which see a massively different valuation of pound sterling. Article 50/hard Brexit/etc. is now very likely (lower pound sterling value), but there’s still the potential of a late change to this approach or a parliament refusal of the bill (higher pound sterling value).
Re: Apple’s UK App Store prices will rise 25% following Brexit currency fluctuations
#54It looks like the GBP has been in decline for years. Here's the last 10 years: http://www.xe.com/currencycharts/?from=GBP&to=USD&view=10Y
Yes, but you can also see the decline rate increased significantly after Brexit.
(not that currency exchange rate is by any means a health indicator)
Re: Apple’s UK App Store prices will rise 25% following Brexit currency fluctuations
#55Earlier quoted context omitted.
> "While critics might note that Apple’s price increase is greater than the pound’s loss in value, financial analysts predict that the market still hasn’t fully priced in the cost of Brexit — that is to say the pound still has further to fall." Someone should probably tell the worlds biggest futures exchange that their forward rate for GBPUSD is wrong then: http://www.cmegroup.com/trading/fx/g10/british-pound.html Me…
Not necessarily - the market has priced in multiple future outcomes according to their probability, each which see a massively different valuation of pound sterling. Article 50/hard Brexit/etc. is now very likely (lower pound sterling value), but there’s still the potential of a late change to this approach or a parliament refusal of the bill (higher pound sterling value).
And of course it suits Apple to focus on the highest probability event, particularly since (unlike FX traders) they don't stand to very quickly lose large amounts of money if low probability but cannot be ruled out yet positive news for the pound happens. The worst case scenario for Apple if the pound rebounds involves people thinking their UK App Store is a bit overpriced until they revise prices again.
Re: Apple’s UK App Store prices will rise 25% following Brexit currency fluctuations
#56"While critics might note that Apple’s price increase is greater than the pound’s loss in value, financial analysts predict that the market still hasn’t fully priced in the cost of Brexit — that is to say the pound still has further to fall." So what mechanisms keep the price from instantly dropping if "everyone" agrees it should be lower? Market inefficiencies? Or lots of money betting on an upswing?
> So what mechanisms keep the price from instantly dropping if "everyone" agrees it should be lower? Market inefficiencies? Or lots of money betting on an upswing?
Asymmetric uncertainty: some people believe there is a small chance that things could change for the better; in that case, the market will go up spectacularly and Apple will update their prices again. If that doesn’t happen, Apple doesn’t have to change their price again, which is, I presume, a fairly costly operation — but the equilibrium rate with an effective Brexit is lower than where it is now.
Once such situation is if the Parliament refuses to approve the referendum: Courts have rules their vote is needed, and most MPs were against Brexit beforehand.
Re: Apple’s UK App Store prices will rise 25% following Brexit currency fluctuations
#57Earlier quoted context omitted.
> ...Apple’s price increase is greater than the pound’s loss in value... It's 5% more than the pound's loss in value next to the Dollar. But bear in mind that for the last 6 months Apple has simply swallowed a 20% reduction in their (and developers) UK App Store revenue. Look at it that way and we in the UK have enjoyed subsidized prices for most of the last year.
If that's true it would suggest that Apple are not in fact basing their price on expected further devaluations of the pound vs the dollar. So either they don't expect the price to fall further, or they do expect it to fall further but don't want to burden their UK customers with even higher prices at the moment.
Or they are aligning their prices against a psychologically meaningful breakpoint such as the increase from £7.99 to £9.99 given in the article, which happens to be about 25%, rather than a precisely 20% increase which would yield a price of £9.59.
People here are reading way more into that 5% than is remotely warranted and for ludicrously incidental reasons. What's actually happening here is very simple. Apple has been taking a hit for a while. They are re-aligning prices to the nearest logical breakpoint. That's it. All that analyst guff about Brexit downside risks because of a slight percentage discrepancy with exchange rates is just because analysts don't know crap about the real reason - marketing.
Re: Apple’s UK App Store prices will rise 25% following Brexit currency fluctuations
#58Earlier quoted context omitted.
> and a US-UK trade deal is likely very soon The earliest that this can happen is 2019, when the UK ceases to be a member of the EU. And since EU rules prohibit members from negotiating their own trade agreements, its probably going to be 2020 or later before a deal is signed.
Not true. Article 50 stipulates the maximum negotiating period, not the minimum. T-May could quite legally declare Article 50, negotiate for a day, then join NAFTA the day after...
No, the UK cannot unilaterally withdraw before the end of the two year period. An earlier withdrawal is only possible if the UK and the EU both agree.
Re: Apple’s UK App Store prices will rise 25% following Brexit currency fluctuations
#59Globalization generally makes things cheaper and easier for consumers, but will also reduce employment in certain areas.
Restoring that employment is a separate track than reducing globalization - that is to say: you can de-globalize and exit whatever trade treaties you like, but those jobs you lost to globalization will not magically come back.
Citizens have been sold a bill of goods in both directions when experts and politicians under-report the side effects and exaggerate the benefits.
Re: Apple’s UK App Store prices will rise 25% following Brexit currency fluctuations
#60I haven't checked (I don't make enough from it to get excited about it) but presumably my income from the app store from the rest of the world should also increase. Does Apple work out my revenue in Dollars and then convert to GBP at the exchange rate at the time of payment?
I imagine they do, if they're like most other multi-currency platforms. If the license terms are on a percent of revenue basis, they'd more or less have to.