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.