Morning Brief – Chinese Yuan Renminbi

Humphrey Percy
Chairman and Founder
Fri 18 Aug 2023

Chinese Yuan Renminbi

Chinese banks have been selling USD and buying CNY in London and New York in the past two days to support CNY at the behest of the People’s Bank of China. While not immediately apparent that it was having much of an effect on CNY given the easy money market conditions with soft interest rates set by the Central Bank, there was more of a positive for the currency on the news that commercial banks were restricting fresh lending. 

USD/CNY 7.2825.

What Next

Before man worked out how to harness a horse, transportation and freight was moved haphazardly by ox- haphazardly as often the ox was not necessarily willing to assist man and also man had limited control over the ox(the yoke not even a gleam in the eye at that juncture in history). Thousands of years later the horse became redundant when its hooves had worn out and before man had the means of attaching steel horseshoes to those worn out hooves. 120 years ago the horseless carriage largely replaced the horse with the advent of the internal combustion engine. All that stands in the way of the electric car revolution taking off is er ….electricity distribution given the lack of a credible network of EV charging stations which is certainly the case in the UK today. Despite this sizable bump in the road, the laudable goals not to mention the costs and practicalities of the Net Zero aspiration are fast assuming elephant in the room status inside Westminster. Outside of Westminster, those goals have been pretty much discounted by more rational voters.

GBP/USD 1.2775.

Longest Deepest Rail Tunnel

In case it comes up at your next trivial Pursuits/Pub Quiz evening, the answer is Switzerland’s Gotthard Base Tunnel. The full answer for maximum points(again no pun but it is a railway report) is 37.1 kms which took 17 years to bore( still no pun for this anecdote) and cost USD 1.2 billion opening in 2016. Anyway it is now comprehensively blocked since 16 freight cars jumped the rails and it will take several months to free them. Doubtless the Swiss national rail network will still run on time.

USD/CHF 1.1210.

The Lionesses

Hatsoff to the English Lionesses for reaching the Womens’ World Cup Final. The call has gone out for a UK bank holiday if England wins on Sunday and for the avoidance of doubt, we are rooting them to win. The cost of a Bank Holiday has been estimated at GBP2.5 billion but the hope and expectation is that apart from pubs remaining open all day from 1000hrs, a UK win would unleash a burst of economic activity. Not to mention the UK mojo effect on the national psyche which dearly needs such a boost. The more cynical among us suspect that the Prime Minister and his Government are praying for such a result having a distinct shortage of pretty much anything in the way of good news.

GBP/EUR 1.1710.

Good Times

This 1979 number from Chic has the distinction of reportedly being the most listened to ie most catchy tune ever. Try it-what it lacks in subtlety, it makes up for with brevity and repetition, hence catchiness! Good times

These are the good times
Leave your cares behind
These are the good times
Good times
These are the good times
Our new state of mind
These are the good times

Happy days are here again
The time is right for makin’ friends
Let’s get together, how ’bout a quarter to ten?
Come tomorrow, let’s all do it again
Boys will be boys, better let them have their toys
Girls will be girls, cute ponytails and curls
Must put an end to this stress and strife
I think I want to live the sporting life

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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