Good morning,

If yesterday’s update was not sufficiently scary, overnight the stakes in the Middle East were raised higher once again as Iran struck back with missile strikes at a number of US targets in Iraq.

As per yesterday’s article, the markets responded duly by once again pushing haven commodities such as gold and the regionally exposed oil higher – to seven-year highs for the former. Other beneficiaries were currencies such as the Japanese Yen and Swiss Franc, which soared against most currencies when the news broke, as more investors, who were not sufficiently spooked by President Trump’s initial action last week, certainly were by the inevitable reply from Tehran. It is important to mention that, although Iran’s overall goal will still be to dislodge US troops from the region; the US and Iran have, so far, not been drawn into an extended war of words over further escalation which, coupled with the reported lack of both Iraqi and US military casualties, means that the Dollar could recover from the situation in the short term.

Across the Atlantic, the much-touted meeting between UK Prime Minister Boris Johnson and European Commission President Ursula von der Leyen will play out, as sterling markets watch on with bated breath for the outcome of the free-trade talks. Expect the pound to react to specifics, while niceties and photos will not cause movement, timeframes and probability of success will. It is also important to remember that no technical discussions can take place until Britain leaves the bloc, which is scheduled for 31st January as dictated by EU law – what we are looking for today is an amicable setting of tone and possibly a stray comment to get sterling moving.

On a separate note, but one of particular interest to many of our clients who have run into difficulty regarding Thai house sales, the Central Bank of Thailand has taken steps to relax laws on Bhat held overseas. In essence, this should make it much easier for Thai banks to send to THB accounts outside of the country, something that, so far, proves to be a source of frustration for those looking to sell in Thailand.

Have a great day.

Author: Joshua Haden-Jones, Senior Private Relationship Manager


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