Daily Brief – Dutch Division

Dutch Division

The 4 way Dutch coalition looks in danger of falling apart over immigration due to Gert Wilders’ party and its brinkmanship over the Netherlands adopting his 10 point hardline immigration plan. Apart from being at odds with EU policy, it is opposed by the rest of the coalition as it involves deporting criminal immigrants, policing the borders and slashing immigration numbers.

EUR/USD 1.1343.

EU USA Trade: Half Time Score

While the latest pause by POTUS on tariffs has been cautiously welcomed, markets have not markedly reacted, simply because in the absence of concrete news and consistency in Trump Trade policy there is little confidence in it being better news. To recap, the EU has offered Zero Zero tariffs on a broad range of goods and services to the USA and the USA has rejected that offer. After 45 days of a 90 day moratorium, letters have been exchanged, invective has risen from the White House and… nothing. So nil nil and little optimism for the second half.

EUR/GBP 0.8385.

Great British Pound

A 3 year high for Sterling on the back of: weaker USD, UK inflation ticking up, and the perception that the Bank of England is less likely to cut UK interest rates much with one 25bp cut pencilled in and a 50% chance of a second 25bp cut before the end of 2025. Meanwhile it’s all put the Great back into the British Pound for the moment up by 8% this year.

GBP/USD 1.3532.

Chinese Yuan by numbers

The South China Morning Post was quick to write yesterday how China plans to make the Yuan (CNH) internationally accepted as the USD alternative given POTUS’ clear cut determination to destroy 80 years of USD as the world’s reserve currency. The 5th most traded currency, the Yuan accounts for 3.5% of FX turnover, a mere 2.2% of global FX reserves compared to USD 58% and EUR 20% and as such has a long way to go. Even assuming that the Chinese currency is not managed as it is now with capital controls and strong intervention.

EUR/JPY 163.09.

River Deep Mountain High

59 years ago today in 1966 Ike and Tina Turner released this stunner which did not do well initially. Produced by Phil Spector who went on to lead a full life of sex, drugs and rock and roll interspersed with firearms – never a good combination even that was not good enough to sell the song. PS was so depressed over that commercial failure that he went into seclusion for 2 years. Never mind it remains a stand out for Dad dancing and hen night shenanigans all these years later.

When I was a little girl
I had a rag doll
Only doll I’ve ever owned
Now I love you just the way I loved that rag doll
But only now my love has grown
And it gets stronger, in every way
And it gets deeper, let me say
And it gets higher, day by day

And do I love you my oh my
Yeah, river deep, mountain high
If I lost you would I cry
Oh how I love you baby, baby, baby, baby

When you were a young boy
Did you have a puppy
That always followed you around
Well I’m gonna be as faithful as that puppy
No I’ll never let you down
‘Cause it grows stronger, like a river flows
And it gets bigger baby, and heaven knows
And it gets sweeter baby, as it grows

And do I love you my oh my
Yeah, river deep, mountain high
If I lost you would I cry
Oh how I love you baby, baby, baby, baby
If I lost you would I cry
Oh how I love you baby, baby, baby, baby

Discussion and Analysis by Humphrey Percy, Chairman and Founder

Click Here to Subscribe to the SGM-FX Newsletter