Morning Brief – European Central Bank and British Pound

Humphrey Percy
Chairman and Founder
Wed 10 Jan 2024

European Central Bank and British Pound

Markets have fully discounted a rate cut of 25bps in EUR rates by April. Conversely the expectation is for the Bank of England to cut UK interest rates by 25bps in June with a 75% chance of that cut being brought forward to May. As it stands, the current thinking is that GBP should therefore be strong versus EUR. Hence the current strength of the British Pound. What is somewhat short sighted about this view is that it does not  factor in sufficiently or at all, the very real headwinds facing the UK economy, such as productivity and , that’s before the political risk premium of an exhausted Government that has been in power for nearly 15 years versus a likely new government that so far has managed not to divulge anything substantive on their policies and plans.

GBP/EUR 1.1620.


After the losses on Monday caused by Saudi Arabia cutting official prices, yesterday saw a bounce back in oil prices caused by Libya’s largest oil field being shut off and a significant amount of oil shipping being diverted away from the Red Sea.
Brent $ 77.85.


No you do not need to blink and rub your eyes, this is about the Germans who almost a quarter of a century after their currency ceased to exist in 2002, are still hanging on to their DMs. At the end of 2023 there were DM12.24 billion in circulation split almost equally between notes and coin. So unless you are a collector or perhaps think that the DM will make a return, it might just be worth emptying your sock drawer and taking those DMs down to the Bundesbank where they can be converted to EUR at the fixed rate of EUR/DM 1.95583.

South Korea

It may seem odd to western readers, but the eating of dogs still continues in South Korea. It is however primarily only on high days and holidays that man’s best friend is at risk of ending in the cook pot. Also it transpires, it is a menu item that divides the generations with younger people rarely participating in that dish. Korean Won largely unmoved. 

USD/KRW 1321.


This is the German word for the spoken song and it was of course this day in 1976 that CW McCall tapped into the zeitgeist of the omnipresent North American fascination with the CB radio and also trucking-think open road, freedom, lots of chrome and powerful engines-when he released this song which stormed to the top of the Billboard chart:


Ah, breaker one-nine, this here’s the Rubber Duck
You gotta copy on me, Pig Pen, c’mon?
Ah, yeah, 10-4, Pig Pen, fer sure, fer sure
By golly, it’s clean clear to Flag Town, c’mon

Yeah, that’s a big 10-4 there, Pig Pen
Yeah, we definitely got the front door, good buddy
Mercy sake’s alive, looks like we got us a convoy

Was the dark of the moon on the sixth of June
In a Kenworth pullin’ logs
Cab-over Pete with a reefer on
And a Jimmy haulin’ hogs

We is headin’ for bear on I-one-oh
‘Bout a mile outta Shaky Town
I says, “Pig Pen, this here’s the Rubber Duck”
“And I’m about to put the hammer down”

‘Cause we got a little ol’ convoy
Rockin’ through the night
Yeah, we got a little ol’ convoy
Ain’t she a beautiful sight?

Come on and join our convoy
Ain’t nothin’ gonna get in our way
We gonna roll this truckin’ convoy
‘Cross the USA

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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