12 July, 2019
What a week it has been in political circles and for the economy.
Sir Nigel Kim Darroch KCMG (Knight Commander Order of St. Michael and St. George) had to resign his post for (effectively) doing his job. He reported on how he saw ‘the Trump Administration’, which was leaked and in typical fashion, President Trump found his phone, went on Twitter and gave him a piece of his mind (not too much mind you).
Whilst during the live TV debate between Jeremy Hunt and Boris Johnson, Boris was asked if he would keep Sir Nigel in his current position as UK Ambassador to the U.S, when (sorry) if he became Prime Minister and in typical Boris fashion, he defended his close ‘mate’ and ally President Trump and put forward his thoughts on the value and strength of our special relationship with the U.S (that would be the same special relationship that saw an outright ban on UK steel imports to the U.S, seeing three (so far) UK steel plants close, adding to the 150,000 jobs lost in the steel industry since the early 1990’s.
Also, Christine Lagarde is set to take over from Mario Draghi as Head of the European Central Bank. Christine, a qualified Lawyer, Politician and Economist is known for her ‘charming leathery smile’ whilst being as stubborn as they come.
Taking into account the ‘Boris Johnson mantra’ of ‘if we cannot get a deal on our terms we will leave with no deal’, it looks set for a no deal Brexit.
Labour are also facing their own dilemmas’, with accusations of the party being ‘anti-semitic’, being thrown at them from all quarters and now from their own inner circle.
Add this to President Trumps’ burning desire to start a fight with anyone, anywhere (Iran perhaps?) and our ‘special relationship’ meaning that we fight right alongside them (normally the SAS go in first by the way), then you can see why the markets, have taken the turn from a Bull to a Bear market, encourging selling of Euros, U.S Dollars and Canadian Dollars alike.
Mark Carneys’ speech yesterday, tried to calm the financial markets and heads of industry somewhat, by effectively saying that the BoE (Bank of England) are ready for Brexit, however it comes.
Whilst Mark Carney is widely respected and has (on numerous occasions) steadied the ship of the English economy on the choppiest of waters, bear in mind that 243,702 jobs have been lost or ‘shipped over seas’ since Brexit was announced.
With so much uncertainty in the air, what we can be certain of is that as bad or uncertain (dependant on your perspective) things may have become, we are just starting the endgame and we can expect the rollercoaster ride to get even more nauseous.
This morning we have a speech by Dr. Gertjan Vlieghe of the BoE and MPC
Gertjan (Gertty to his mates) was an economic assistant to Mervyn King (previous Governer of BoE), a Bond Strategist and a Director of Deutsche Bank. Today he is expected to reaffirm the MPC’s decision to hold the Bank rate at 0.75% and pledge to a gradual (but limited) rate rise over the next forecast period.
Currency Index has been extremely busy of late, with clients purchasing their Euro’s and Dollars now, whether that be through a forward contract or ‘Currency On Account’ and clients also making the most of the political turmoil and ‘repatriating’ their foreign currency back into Sterling.
Dont miss out on an opportunity, why not give your Currency Index Consultant a call today and discuss what options are available to you.
- Sterling had a couple of brief rallies towards the end of last week 22 July, 2019
- Sterling hits lows of 2019 19 July, 2019
- ‘Backstop is dead’ and Sterling is lowest performing currency 17 July, 2019
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