Morning Brief – US Dollar

US Dollar

With the US Election just over 6 months away it is time to think about the implications for USD with a new President. In case you have missed it Trump plans In the event he wins to devalue USD to boost US exports as part of his MAGA philosophy. As we know ex VP Mike Pence is unlikely to make the cut again as VP as he refused to support Trump’s behaviour over the Capitol demonstrations in January 2025, but he has further distanced himself from Trump this weekend by arguing against a USD devaluation.

EUR/USD 1.0690.

EU Realpolitik

This time and it being a reflection of his waning/ cratering popularity it is Monsieur Le President of France Emanuel Macron who while delivering a lecture at the Sorbonne university in Paris made two key points among some lesser ones including the less than factual statement that the EU is mortal(but we know what he meant):

1. The EU needs to change/modernise both its economic and defence models as otherwise it risks becoming irrelevant versus the power blocs of the USA and China.

2. The USA will focus primarily on the USA rather than the EU. Sounds trite/obvious but certainly a positive awakening at the Elysee Palais at least.

GBP/EUR 1.1676.

US Interest Rates

With rate cutting ardour cooling at the Federal Reserve YS government bond yields have risen sharply and now offer compelling yields for at least part of an investment portfolio and also decent value. How can that be if rates are not going to fall as much as expected? The answer is that they will fall but just not as soon as hoped a couple of months ago.

10 year UST 4.66%

Norway

A Polish tourist was fined NKR 12,500 or GBP900 for photographing a walrus which under the Svalbard Environment Act is forbidden and is designed to protect whales, arctic foxes, reindeer, polar bears, seals and walruses. The tourist apart from getting unwisely close to the walrus, was captured on the same ice floe so determined was he to snap the animal.

USD/NKR 11.04.

In The City

This day in 1977 when Punk was big, no band was to become bigger than the Jam who released this their first record which captured the zeitgeist of the time perfectly for their target market. After all Punk was not for anyone over 25!

In the city there’s a thousand things I want to say to you
But whenever I approach you, you make me look a fool
I wanna say, I wanna tell you
About the young ideas
But you turn them into fears
In the city there’s a thousand faces, all shining bright
And those golden faces are under twenty-five
They wanna say, they gonna tell ya
About the young idea
You better listen now you’ve said your bit-a, go!

And I know what you’re thinking
You still think I am crap
But you’d better listen, man
Because the kids know where it’s at

In the city there’s a thousand men in uniforms
And I’ve heard they now have the right to kill a man
We wanna say, we gonna tell ya
About the young idea
And if it don’t work, at least we said we’ve tried In the city, in the city

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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