Daily Brief – EURO

EURO

At its weakest for 2 years against USD and reflecting a fall of 9% in 2024, EUR has a look of drifting down towards parity with USD and then below. The news on gas supplies from Russia being stopped by Ukraine, the likelihood of a more dovish ECB agenda on interest rates and the overhang of political uncertainty in the two largest EU members, France and Germany make for a weak EUR picture.

EUR/USD 1.0308.

UK North Sea Energy

The stated aim of the UK government is to quadruple offshore energy output by 2030. As a result of the chosen means of achieving that the windfall tax on UK located oil producers of 38% is causing a marked reduction in investment and an exiting from the business. North Sea oil production is estimated to fall by 20% in 2025. That oil will need to be obtained from overseas markets where there is less emphasis on green credentials. There is also the not inconsiderable matter of the UK at a time of such low economic growth in ignoring the assets that it possesses in favour of tapping overseas oil markets.

At the end of last week President elect Trump waded into the debate offering his more extreme take which is to scrap the UK windfarms entirely in favour of carbon.

GBP/USD 1.2423.

EUR1 house

Those savvy Sicilian mayors are no fools when it comes to attracting bargain hunting foreigners by offering village houses in Sicily at a cost of €1. The buying process will in fact set one back almost €6000 and then there is the refurbishment. Realistically that will come to €250,000 to €500,000 and will of course bring jobs and earnings into those underpopulated poor villages -and secure the re-election of those mayors.

EUR/JPY 162.08.

Heart of Gold

In case you missed it, veteran Canadian singer songwriter Neil Young was misinformed about UK festival Glastonbury’s long term partner the BBC and how the corporation wanted to present his act in June this year at the annual music fest. All ironed out now and Neil Young will play.

GBP/EUR 1.2052

Shine on You Crazy Diamond

This day in 1975 Pink Floyd began recording one of their finest albums Wish You Were Here which included this song dedicated of course to brilliant founder band mate Syd Barrett who had lost touch with this world by that time fuelled with toxic amphetamine cocktails taken too frequently and in industrial doses. 

Remember when you were young, you shone like the sun.
Shine on you crazy diamond.

Now there’s a look in your eyes, like black holes in the sky.
Shine on you crazy diamond.

You were caught on the crossfire of childhood and stardom,
Blown on the steel breeze.

Come on you target for faraway laughter,
Come on you stranger, you legend, you martyr, and shine!
You reached for the secret too soon, you cried for the moon.
Shine on you crazy diamond.

Threatened by shadows at night, and exposed in the light.
Shine on you crazy diamond.

Well you wore out your welcome with random precision,
Rode on the steel breeze.

Come on you raver, you seer of visions,
Come on you painter, you piper, you prisoner, and shine!

Discussion and Analysis by Humphrey Percy, Chairman and Founder

Click Here to Subscribe to the SGM-FX Newsletter