Daily Brief – US Dollar Safe Haven

US Dollar Safe Haven

Despite the political, military, and economic upheaval that continues between the USA and Iran, USD remains the safe haven currency of choice although as it declined marginally further for the 7^th straight session against the major currencies yesterday, that distinction is beginning to be a bit tarnished. Markets are still hoping for a diplomatic solution, and in the Far East the expectation of a rate hike by the Bank of Japan has now receded from a 57% probability to 32%. However, given that USD/JPY stands at just below 159, even that expectation in the current market environment is far from being nailed on since there is still the belief that 160 for Japan is a redline which will result in a rate hike. Meanwhile, GBP is enjoying that USD weakness and has shot through 1.35.

GBP/USD 1.3567.

Top 5 EU Economies versus top 5 US States by GDP in EUR Billions 

In 5^th place in the EU and USA are respectively the Netherlands with 1180 and Illinois at 1063; in 4th is Spain with 1687 and Florida with 1623; 3^rd is Italy at 2258 and New York with 2183; 2^nd is France with 2979 and Texas with 2570; in 1^st place is of course Germany at 4469 and California with 3761. In the light of the recent face-off between POTUS and the EU leaders, citizens of those Top 5 EU countries might well expect their leaders to have more lead in their respective pencils given the size of their individual economic power. In case you are wondering, the UK stands at 3545 and accordingly also might well expect more in the way of mojo from its Prime Minister when it comes to the world economic stage being the 6th largest economy country.

EUR/USD 1.1793.

International Energy Agency

The Washington USA speech by IEA Executive Director Faith Birol to the Atlantic Council on Monday evening is worth paying attention to in short, the severity and consequently the effects of the oil supply crisis have not yet been felt. Prices have not yet moved as might be expected given the unprecedented nature and term of the supply disruption. Finally, this energy crisis is global in nature, and no country is immune from the consequences.

Brent USD 94.78.

Oddly Named Towns

Clearly, given our Island Story, there are too many oddly named places to list, but the UK certainly has a long list of oddities as do other countries notably in the Austrian and German alps with the unfortunately named F*cking and W*nk in addition to the less contentious Kissing, Petting and Wedding where the street signs are routinely stolen by touring Brits and other English speaking nations. In the UK, we have a clutch of contenders: in North East Scotland: Dull, Lost, Fattiehead, and Brokenwind. East Anglia has Great Snoring, Nasty, Matching Tye, and Horrid Hill. The West Country offers Brown Willy, Crapstone, Curry Mallet, Beer, and Droop. Stockbroker belt Surrey manages Donkey Town while Kent, the Garden of England has Pratts Bottom.

EUR/GBP 0.8692.

Let it Be

If you are a believer in conspiracies rather than coincidence you may have clocked that today is the anniversary of Abraham Lincoln’s final visit to the theatre where he was of course fatally shot in 1865 as well as slightly more recently in 1912 the day that the liner SS Titanic struck an iceberg and sank in the North Atlantic. More recently still, in 1971, the Beatles won an Oscar for their album Let it Be that remains a classic essential for any credible music collection.

When I find myself in times of trouble, Mother Mary comes to me
Speaking words of wisdom, let it be
And in my hour of darkness she is standing right in front of me
Speaking words of wisdom, let it be

Let it be, let it be, let it be, let it be
Whisper words of wisdom, let it be

And when the broken hearted people living in the world agree
There will be an answer, let it be
For though they may be parted, there is still a chance that they will see
There will be an answer, let it be

Let it be, let it be, let it be, let it be
There will be an answer, let it be

Let it be, let it be, let it be, let it be
Whisper words of wisdom, let it be

Let it be, let it be, let it be, let it be
Whisper words of wisdom, let it be, be

And when the night is cloudy there is still a light that shines on me
Shinin’ until tomorrow, let it be
I wake up to the sound of music, Mother Mary comes to me
Speaking words of wisdom, let it be

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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