Daily Brief – British Pound

British Pound

A 7 month high versus USD, and GBP is at present benefitting from the self inflicted wounds that the USA is continuing to suffer, the latest of which is the speculation over whether POTUS will defenestrate the Chair of the Federal Reserve. At the moment, and we choose our words carefully given the fickle nature of current policy making from the USA, GBP could move higher given that the UK looks to be less affected by US tariffs than some other major economies, which is outweighing concerns over the UK’s labour market and economic growth.

GBP/USD 1.3365.

Japan and the USA

This week Japanese officials are travelling to Washington to talk to the USA about…? The Japanese scrupulously polite as ever have said that they are coming to listen to the USA. The subtext of course is that Japan wants to talk trade and explore whether there is scope for all those Toyotas to be sold in the USA at a price that the American market can or will pay. The Americans have an entirely different agenda which is to persuade Japan to support the Yen and strengthen it against USD. If one listens to the previous mood music, the Japanese have ruled out currency intervention (mostly) and POTUS has been unswerving and highly critical of Japan’s weak Yen. No official agenda has been set but the above should cover it. Let’s wait and see but the best outcome will be for a broad agreement on stable exchange rates to emerge.

USD/JPY 140.28.

Handbag Word Wars

Tiktoker Wang Seng claims to work for a Chinese handbag manufacturer and before his Tik Tok was taken down announced that 80% of luxury handbags were made in China. Strict rules govern the Made in Europe tag and it seems at first sight that Hermes and Louis Vuitton do indeed manufacture in Europe while other brands such as Ralph Lauren maybe less so. Upon examination it turns out that many bags are mostly produced in China and then finished off in say Italy or France. Back to Made in Europe: upon even closer examination it transpires that the title on the label means that a product’s “last substantial transformation” must occur in the country of production. Started in China and Finished in France does not quite have the same ring about it.

EUR/GBP 0.8589.

EU Recycling

The great Green minds of the EU are putting their grey cells to work on exploring the way to re-cycle the following 5 waste products which so far are proving out of reach: baby nappies; smartphone glass; wind turbine and e-scooter magnets; food waste to create biostimulant fertiliser; cigarette butts. While all too easy to poke fun at such green priorities, no-one could argue that mankind would be better off if the EU finds the answers. Meanwhile those of us who have visited Singapore and have seen the spotless trash free, butt free, chewing gum free streets might wonder why the EU doesn’t take a leaf out of the Lion City’s book.

EUR/USD 1.1489.

Spirit in the Sky

No singer fits the one hit wonder description better than Norman Greenbaum who saw this number get to Number 3 on Billboard this day in 1970 and go on to sell 2 million copies before…..nothing. The song is much better than the lyrics suggest but that sadly was not enough to progress Norman’s singing career further.

When I die and they lay me to rest
Gonna go to the place that’s the best
When they lay me down to die
Goin’ up to the spirit in the sky

Goin’ up to the spirit in the sky (spirit in the sky)
That’s where I’m gonna go when I die (when I die)
When I die and they lay me to rest
I’m gonna go to the place that’s the best

Prepare yourself, you know it’s a must
Gotta have a friend in Jesus
So you know that when you die
He’s gonna recommend you to the spirit in the sky (spirit in the sky)

Whoa, he’ll recommend you to the spirit in the sky
That’s where you’re gonna go when you die (when you die)
When you die, and they lay you to rest
You’re gonna go to the place that’s the best

Never been a sinner, I’ve never sinned
I’ve got a friend in Jesus
So you know that when I die
He’s gonna set me up with the spirit in the sky

Discussion and Analysis by Humphrey Percy, Chairman and Founder

Click Here to Subscribe to the SGM-FX Newsletter