US Dollar
All the talk of the USD having had its day may be gaining in credence every day that goes by with the POTUS and his Administration seemingly determined to dismantle the post WW2 global currency order and depreciate the USD, but most people operate in a much shorter timeframe than the time it will take to engineer a global shift in USD’s strategic importance. Shorter term currency decision making encompasses asset acquisition in the current financial year, repatriation of profits, taking a vacation, sending a lucky child to study in a foreign country or electing to emigrate as examples. For the twin prime reasons of ultra high geo-political uncertainty, and the lack of a credible alternative given that USD accounts for 88% of one side of all currency transactions globally, for the next 6 months at least USD remains a currency to buy rather than sell.
EUR/USD 1.1566.
Germany
Yesterday the Leibniz Centre for European Economic Research released its indicator of economic sentiment which measures the mood of German companies and that showed a big improvement in May over April. This uptick in sentiment was also reported by the Kiel Institute and the Ifo Institute so it seems its cheer all round in Germany. So in short, the Germans have seen beyond TT or Trump Tariffs and are focused on the government fiscal stimulus through the removal of the debt brake plus the immense increase in defence spending, which has taken Germany to the position of being the 4th largest military spending nation.
GBP/USD 1.3562.