Let's start with the euro. Uh we've
heard from Isabelle Schnabble at the ECB
talking about inflation risks. We get
inflation data a little bit later out
this morning. Uh but what what are you
seeing in the euro that's of interest?
Well, I think what's interesting is the
fact that it's really seen through a lot
of these potential threats to its
strength. It's still trading near 2021
levels. Um you've got this um extreme
political uncertainty in France, you
know, with a possible government
collapse next week. um you've got the
far right sort of pushing for elections
and you've also got things like the
Spanish budget that you were just
talking about coming into play as well.
you there's a lot of concern there and
yet really we've seen it holding at
these like very high levels throughout
um whilst you've also but the same time
you've seen the longer dated bond yields
you know elevated so that risk is priced
in but not in the euro um and I think
that in itself is quite interesting
particularly you look at compared to
last year when we had the French
political crisis you know we saw the
euro sinking quite dramatically against
the dollar also against the pound in
Um, and actually it's holding up there
too this time. And I think really a lot
of that just comes down to the dollar
weakness and it's holding up against the
pound as well. Still above 86 p. And
that also signifies that it's not about
the euro. It's not about sterling. It
it's all about the dollar weakness which
we've seen um you know really persistent
for the last five days. It's up a bit
today as the US comes back from holiday
but again it's been falling for the last
five days and considerably throughout
the year. So, does that continue? Like
the the US is kind of back to school
today. Feels like there's a lot going
on. You've got a lot of politics
happening. You've got an awful lot of
economics happening. You've got payrolls
coming up later on this week. I are we
in the position where dollar weakness is
going to persist. I the the if you look
at Euro dollar doesn't feel like a euro
story at all as you say.
Yeah. And I think there are some key
catalysts coming up for the dollar. I
think as things stand that expectation
that the Fed is going to cut interest
rates which has been under quite a lot
of pressure to do so. um is fairly it's
priced in. It's very highly expected.
Yeah.
Of course that this key payrolls data
this week. We've also got inflation
coming up. You know, if they show a a
hotter in inflation um environment or a
stronger labor market than expected,
that could shift the picture slightly.
That could make the euro and other
currencies a bit more vulnerable and
shift the picture for the for the
dollar. But essentially with that sort
of macro uncertainty, lower rate
environment, very likely it does seem to
support the dollar weakening going
forward.
What what is dollar erosion doing to the
gold story?
Well, we just saw gold um exceed its
April records. Again, April being a
really interesting time because that's
when all of the sort of tariff turmoil
kicked off and we saw gold ascend um at
the same time as well, but we were
seeing that dollar weakness then. Um
it's it's continuing to move upwards as
people move to precious metals. there is
a real sort of sell the US um story
emerging there. Um but again that could
be potentially um disrupted if we do see
um sort of weaker US economic data
coming through at all um you know in the
next couple of weeks. So I think that's
really going to be the key thing to
watch for for the um you know precious
metals market as