Daily Brief – Great British Pound

Great British Pound

For buyers of USD and EUR versus GBP, the lead up to the results of the US Presidential Election have thrown up an opportunity given that USD has seen a weaker performance in the past two days. The likelihood is that there will be some swings in the next few days ahead of the result of the election becoming clear; that will enable nimble opportunists to lock in some decent levels remembering of course that both the Bank of England and the Federal Reserve are both expected to cut interest rates by 25bps on Thursday. Failure to do so by firstly the Bank of England will send GBP sharply higher while if the Federal Reserve also disappoints that will send the USD back to its levels of last week. Seatbelts on and helmets also, if not on, to hand.

GBP/USD 1.2995.

Germany Auto Industry

As we have written recently the German car industry is seeing closures of factories that in earlier years would have been thought unthinkable – most recently VW. It may not have been obvious but the ripples of such closures spread widely: yesterday Schaeffler the car parts manufacturer announced 3700 job cuts and downsizing of the workforce at 10 factories both in and outside Germany which will save the company EUR 290 m by 2029.

EUR/GBP 0.8389

Greenhouse Gases

A report released yesterday by the London Stock Exchange Group outlined the consequences of not getting greenhouse gases under control. By 2050 almost 50 major cities globally will be facing the dire consequences of not doing so whether it is floods, heatwaves, cyclones or water stress. Amsterdam is threatened by rising sea levels, London also by rising sea levels but also by heat and Madrid by the numbers of days with extreme heat. Further afield, Singapore, Jeddah, Jakarta, Riyadh and Dubai will all suffer from many more days where the heat will be unbearable. In the wake of the floods in Spain which are a striking example of the terrible consequences of climate change, the attendees at COP29 in Brazil later this month will have plenty to focus their minds.

EUR/JPY 165.66.

LignoSat

Whatever next? It turns out that the Japanese have made a test satellite that was blasted into space yesterday to go firstly as far as the International Space Station and then, if successful to go on to Mars. If that all sounds a bit dull and hardly news, that satellite will be made of wood from the honoki tree which is a type of magnolia native to Japan. Undoubtedly eco friendly but the argument pro wood is that in space it is durable since there is no oxygen and therefore much more resilient to rot or even woodworm than here on earth.

GBP/CHF 1.1227.

If I Can Dream

38 years after his death, Elvis Presley succeeded in getting to the Number One spot in the Charts for the 12th time with this album this day in 2015 which meant that he has had more number one albums than any other male soloist recording artist – always a useful fact for the pub quiz as the nights draw in at this time of year.

There must be lights burning brighter somewhere
Got to be birds flying higher in a sky more blue
If I can dream of a better land
Where all my brothers walk hand in hand
Tell me why, oh why, oh why can’t my dream come true
Oh why

There must be peace and understanding sometime
Strong winds of promise that will blow away the doubt and fear
If I can dream of a warmer sun
Where hope keeps shining on everyone
Tell me why, oh why, oh why won’t that sun appear

We’re lost in a cloud
With too much rain
We’re trapped in a world
That’s troubled with pain
But as long as a man
Has the strength to dream
He can redeem his soul and fly

Deep in my heart there’s a trembling question
Still I am sure that the answer, answer’s gonna come somehow
Out there in the dark, there’s a beckoning candle, yeah
And while I can think, while I can talk
While I can stand, while I can walk
While I can dream

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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