Daily Brief – Currencies on the Move

Currencies on the Move

USD up due to Switzerland cutting its rates again and a fall in GBP after the widely expected announcement yesterday lunchtime by the Bank of England of no change contained wording that the market has taken as a promise to cut in August. All that plus the ongoing France debt and political uncertainty meant that USD strengthened. Then Norway’s Norges Bank held rates at the 16 year high of 4.25% which meant that the NOK strengthened against EUR. Lastly the JPY fell to its lowest since April 29 with USD/JPY at 158.55 which prompted a rather desperate statement from Japan’s Masato Kanda who said that there was no limit to the resources available to support JPY. So it was not just the temperature in London that was (finally) climbing yesterday, the volatility in currencies is increasing. Stand by for a hot summer.

EUR/USD 1.0720.

UK Blue Chip Shares

With the average forward yield of UK Blue Chip shares standing at 3.6%, a look into the individual shares in the FTSE 100 reveals that WPP shares offer a yield of 5.2% with dividend yield cover of 2.3 times. Legal and General on the other hand offers a yield of 9.2% but with dividend yield cover of 1.1 times but offset with a healthy capital position. If one were to buy both in equal amounts that would give a yield of 7.1% almost double the average yield of the FTSE 100. Worth a look as both an equity play-both shares are slated to appreciate-but also as a super fixed income type return.

GBP/USD 1.2677.

Sainsburys

The latest UK supermarket to quit banking is Sainsburys hard on the heels of its competitor Tescos as it announced the sale of its banking arm to NatWest. Lombard Street in the City of London used to be the or if not the certainly one of the most famous banking streets in Europe, but in latter years those banks have morphed and moved elsewhere leaving just one ATM outside the Lombard Street Sainsbury’s mini mart. This NatWest news marks a change for Sainsbury’s Bank and who knows, may just signify a return to more ATMs or even some banks in Lombard Street.

GBP/AUD 1.9010.

Hastings, Sussex pier

Astonishingly Hastings pier has been named as the Sixth best venue to watch England on screen at the Euros. Rated by Google as 4.2 out of 5 and at a cost of GBP11.63, Hastings can expect hordes of thirsty fans to descend on the seaside town in the next weeks. Rather optimistically the Hastings tourist authority is touting the competitive cost of soft drinks at GBP1.70. Watching England’s finest in a fountain in Frankfurt last night, refreshments looked to have been taken on board and appeared to be somewhat stronger in alcoholic content. Not mentioned was that the fifth best place for England fans to watch the Euros continues to be from behind the sofa with both hands over ones eyes.

GBP/EUR 1.1823.

When Two Became One

In their heyday 90’s Brit girl pop band The Spice Girls had revenues of GBP 40 million and were living the high life. Scroll forward to this day in 2019 and the girls’ cash position had dwindled to just GBP 86,000. And that is why the rumours persist even today of a reunion if only the band can be persuaded given that the two who are most reluctant have both made first rate marriages: Victoria Beckham’s husband seems endlessly willing to subsidize her loss making fashion business and Geri Horner is of course married to one of the top figures in F1 who recently burnished his goodie two shoes image with some decidedly bad boy behaviour.

… Candlelight and soul forever
A dream of you and me together
Say you believe it, say you believe it
Free your mind of doubt and danger
Be for real, don’t be a stranger
We can achieve it, we can achieve it

… Come a little bit closer baby
Get it on, get it on
‘Cause tonight is the night when two become one

… I need some love like I’ve never needed love before (wanna make love to ya’, baby)
I had a little love, now I’m back for more (wanna make love to ya’, baby)
Set your spirit free
It’s the only way to be

Have a Great Weekend!

Discussion and Analysis by Humphrey Percy, Chairman and Founder

Click Here to Subscribe to the SGM-FX Newsletter