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January 2017

Sterling drops on PM’s comments re Brexit

Published: Monday 09 January 2017

  • Sterling drops on PM’s comments re Brexit
  • Euro weaker on fears over German recovery
  • US Dollar shrugs off poor employment report

Anyone who made it across London to their desk today…I salute you. What a palaver. Tubes on strike, gridlocked roads, kamikaze cyclists; all we needed was a plague of frogs just to top things off. I know this is very much a London thing, though. My brother lives in Cornwall and three cars in a row makes the local paper.
Storm clouds are circling above Germany’s economy; which many German institutions believe is constrained to the point of damaging the recovery. Those same storm clouds are hovering above Chancellor Merkel. Her Vice Chancellor expressed the view that Europe is more divided than ever and a break-up of the European Union is no longer inconceivable. That view has weakened the Euro against most other currencies. This morning’s employment news is unlikely to change that, but 9.8% is still a dire level for unemployment across the EU.
The Euro hasn’t weakened against the Pound, though. Sterling has been hit by the now regular speculation over whether we will see a soft or hard Brexit. Few people seem to be able to explain what those terms mean, but everyone is convinced that the one they don’t like is bad for the economy. UK Prime Minister, Theresa May, has added to the expectation of a much more certain break between the UK and EU and the markets have convinced themselves that Britain will, therefore, not have access to the single market. Sterling has taken a tumble against all currencies. That’ll fuel inflation, but will help exporters.
The US Dollar shrugged off the poor December employment report. Mind you, the US employment data is fickle and apt to be changed and revised month on month. So ‘caution’ is probably a good attitude to adopt when the data doesn’t match the forecasts.
I loved the comments Hugh Laurie made in his speech at the Golden Globe Awards where he received the award for Best Supporting Actor. He said, "I don't mean to be gloomy but it has the words 'Hollywood,' 'foreign' and 'press' in it," with obvious references to the US President Elect. He added, “I also think to some Republicans even the word ‘association’ is slightly sketchy.” I love a barbed comment.
Understanding Marketing
You see a fabulous girl/guy at a party. You approach them and say, "I'm an amazing lover." That's Direct Marketing.
You're at a party with a bunch of friends and see a fabulous girl/guy. You have one of your friends approach them, point at you and say, "She's/He's an amazing lover." That's Advertising.
You see a fabulous girl/guy at a party. You approach them to get their telephone number. The next day you call and say, "Hi, I'm an amazing lover." That's Telemarketing.
You're at a party and see a fabulous girl/guy. You get up, straighten your clothes, walk up and pour them a drink. You open the door, pick up their bag after it drops, offer them a ride, and then say, "By the way, I'm an amazing lover." That's Public Relations.
You're at a party and see a fabulous girl/guy. They walk up to you and say, "I hear you're an amazing lover." That's Brand Recognition.

Daily Currency Insight by David Johnson

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