British Pound
GBP is currently in fashion: with a record number of long positions and currently at the top of the G7 currency performance charts and after a period of being deeply unfashionable GBP is wanted-in a good way. The reasons for this are diverse: first off is the Bank of England’s caution on cutting interest rates, then there is the post election bump when as the new government has at least 5 years in power the epithet of stable government has crept into the narrative and last but not least, there have been some tentative positive signs of the economy showing signs of picking up. Now French fund manager giant Amundi has weighed in and said that they see GBP rising further. In no way wanting to spoil the party it is worth reading the small print of Amundi’s forecasts which include EUR/GBP moving as far as GBP 0.82. Sterling veterans will smile wryly at this definition of being worthy of noting: 1.6% used to be the movement of a single morning or not that occasionally less than an hour.
EUR/GBP 0.8408.
Taiwan
A rule of thumb is that for each percentage point rise in inflation, there is a 7% rise in commodities.
It may seem far away and a remote possibility but Taiwan’s government is highly focused on the threat of a Chinese invasion. This week sees the annual civilian and military rehearsals for such an eventuality-the Han Kuang anti invasion exercises. In past years the accusation has been levelled that the exercises were more performative than real with actors playing the parts of invading Chinese forces. This year, there is none of that and many of the drills are deadly serious, unscripted and involve live fire.
USD/JPY 156.21.