Worldwide Financial Planning

Back in the 1990s, the dollar held over 70 per cent of global foreign exchange reserves. Today, it’s down to 58.4 per cent, and still falling. That’s not a collapse, but it’s a message.

By making a show of meeting its Stability Rule of reducing borrowing in the fifth year of any forecast, the chancellor laboured to show that despite borrowing rising in the short term, gilt investors just need to be patient to allow reforms and rising growth to tame borrowing. Muted market reaction shows the cuts have bought some time, but the small margin in the Chancellor’s forecast doesn’t allow a lot of room for further disruption.

I WAS to follow up on the potential impacts of people moving away from the dollar toward using other payment clearing systems and what impact that would have, but forgot the Spring statement was coming and so used this opportunity to get some popcorn out, ask a sommelier to wine pair with the popcorn and hey presto, you have my excitement below.

Despite the cautious attitude of central banks, government bonds have continued to rally. Markets are seeing a slightly higher chance of rate cuts later this year, but investor nervousness means defensive assets, including government bonds, remain in demand.

A pub question to me a year back: “Why do countries all use the same money if they’re not the same country?” Smart question, and one the world is beginning to ask itself.

In addition to the confusion caused by US trade policy, there is concern that the US economy is slowing. But despite some quirks in the shortterm US data, the US economy has not changed that dramatically in the last few weeks.