Daily Brief – British Pound

British Pound

The news that Goldman Sachs is predicting a GBP/USD level of 1.40 in the next 12 months reflects the positive sentiment based on interest rate differentials as we wrote yesterday plus a re-rating of the USD which seems less certain given the current geo political turmoil-see below. However GBP is now enjoying its highest levels for 2+ years and in the present climate it is a case of buying dips in GBP rather than selling spikes which has not been a feature for some considerable time.

GBP/USD 1.3375.

Oil and Gold

The escalation in Israel’s stance on Hezbollah in the past week which has led to the loss of life in Lebanon and a fast developing refugee crisis has raised the fears of a wider regional conflict still further. This in turn has seen a flight towards Gold which has risen and concern over disruption to the Oil supply which has reversed the downward trend in prices caused by the flattening US and Chinese economies.

Gold USD 2627.

Brent Oil USD 75.38.

China Stimulus

Yesterday evening global markets were lifted by the stimulus package to China’s economy announced by Governor Pan Gongsheng of the People’s Bank of China. Worth the equivalent of USD 142 billion it is more the message than the quantum. Asian markets in particular took heart.

EUR/USD 1.1162.

Malaga, Spain

Wondered why plastic bottles now have inseparable tops? The answer is that since July 3 in the EU it is mandatory for plastic bottles of less than 3 litres to come with such tops. Theoretically the UK is not obliged to comply with this EU law but in practice it makes no sense for manufacturers to churn out different unattached bottle tops just for the UK. So while many UK people are suspicious that this was a further step on the road to the nanny state, that is the reason.

GBP/USD 1.3124.

Those Were The Days

At Number 1 this day in 1968 where it stayed for 6 weeks was this song sung by Mary Hopkins and produced by Paul McCartney. 

Once upon a time there was a tavern
Where we used to raise a glass or two
Remember how we laughed away the hours
Think of all the great things we would do?

Those were the days, my friend
We thought they’d never end
We’d sing and dance forever and a day
We’d live the life we choose
We’d fight and never lose
For we were young and sure to have our way
La-la-la-da-da-da
La-la-la-da-da-da
Da-da-da-da, la-da-da-da-da

Then the busy years went rushing by us
We lost our starry notions on the way
If by chance I’d see you in the tavern
We’d smile at one another and we’d say

Those were the days, my friend
We thought they’d never end
We’d sing and dance forever and a day
We’d live the life we choose
We’d fight and never lose
Those were the days, oh yes, those were the days
La-la-la-da-da-da
La-la-la-da-da-da
Da-da-da-da, da-da-da-da-da

Just tonight I stood before the tavern
Nothing seemed the way it used to be
In the glass I saw a strange reflection
Was that lonely woman really me?

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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