Daily Brief – US Dollar

US Dollar

Uncertainty in the USA caused by a consequential cocktail of on off on tariffs, inflation concerns, derailed interest rate policy, federal spending and higher taxes is outweighing the safe haven status of the Dollar. In more normal times, the Ukraine ceasefire brinkmanship between Russia and the USA would drive up the USD. Instead, in the last week the USD Index has dropped precipitously by almost 4%.

EUR/USD 1.0879.

SAFE

Managed through its SAFE offices, China has USD 3.2 trillion of foreign exchange reserves and manages about 16% of that in Hong Kong. Reports that the allocation to Hong Kong will increase up to 30% are thought to be symptomatic of the territorial expansionist aspirations of the People’s Republic. The perception is that China holds a huge proportion of the US debt mountain that is now USD 36 trillion; that is wrong with China holding USD 759 billion down from USD 1.3 trillion in 2008. Needless to say if those reports of an increased allocation to the Hong Kong market are correct it will provide a significant boost for a reduced Hong Kong and will underpin the market.

GBP/USD 1.2935.

Demokratiit

With 30% of Greenland’s vote, Demokratiit are forming a coalition and standing for the slow route of independence from Denmark’s reflects a rejection by Greenlanders of the blandishments of POTUS and the USA. Despite that, Donald Trump is still talking about annexing the world’s largest island.

EUR/JPY 161.69.

Persistance Aromatique Intense

That is how wine experts who invariably are French or in English Intense Aromatic Persistence measure the length of different wines. Strip out the flimflam and if a wine is considered long it denotes that the taste lasts in the mouth. The longer the wine the better it is considered. A light celebrity owned rose wine – think Kylie – for example would not be long. A vintage claret or a storied Rhone such as Domaine Romanee Conti would be. In terms of time, 5-6 seconds of taste for a decent wine, up to 10 seconds for top wines, and for exceptional outside most people’s budget wines as much as 20 seconds. If you want to out bluff a wine buff talk about the number of caudalies as that is the professional term for a wine’s persistence in the mouth with 1 caudalie equalling 1 second. 

EUR/GBP 0.8412.

Tragedy

This day in 1979 the Manchester/Australian Florida based Bee Gees released their smash album Spirits Having Flown which in addition to winning multiple awards has the distinction of the first three songs on it all subsequently being Number 1’s in their own right. Certainly not a commercial tragedy for the Bee Gees here it is:

Here I lie, in a lost and lonely part of town
Held in time, in a world of tears I slowly drown
Goin’ home, I just can’t make it all alone

I really should be holding you, holding you
Loving you, loving you

Tragedy
When the feeling’s gone and you can’t go on
It’s tragedy
When the morning cries and you don’t know why
It’s hard to bear
With no-one to love you, you’re goin’ nowhere

Tragedy
When you lose control and you got no soul
It’s tragedy
When the morning cries and you don’t know why
It’s hard to bear
With no-one beside you, you’re goin’ nowhere

Night and day, there’s a burning down inside of me
Oh, oh
Burning love, with a yearning that won’t let me be
Down I go and I just can’t take it all alone

I really should be holding you, holding you
Loving you, loving you

Tragedy

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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