Collinson FX: Aug 27: European markets dive after potential collapse of French Govt
by Collinson FX 27 Aug 2025 10:34 NZST
27 August 2025
Bleu Blanc - Class 40 - Start Rolex Fastnet Race - Cowes - July 26, 2025 © Richard Gladwell - Sail-World.com/nz
European markets nosedived overnight, triggered by the potential collapse, of yet another French Government.
The minority Government has put the Budget up for a confidence vote, on September 8th (which is likely to fail), bringing down the Government. This was enough to poison European markets, while US markets were flat, preoccupied with the sacking of a Federal Reserve Board member, by POTUS.
The USD remained steady, with the EUR trading below 1.1650, while the GBP drifted to 1.3470.
Commodity currencies remained steady, with the AUD attempting to regain 0.6500, while the NZD hit 0.5850. The RBA minutes revealed further rate cuts were likely, this year, thus markets will be watching today's inflation release closely.
About Bleu Blanc: The main skipper of Bleu Blanc was Quentin Le Nabour. It competed in the Class40 (Open 40) category in the 2025 Rolex Fastnet Race. Bleu Blanc is to the Mach 40.6 design and was designed by S. Manuard, built at the JPS Production shipyard, and was first launched in 2024
Aug 27: Markets and data call tune
Equity markets took profit, following the big gains booked Friday, triggered by admissions from Fed Chair Powell that rate cuts were due.
Powell has resisted unprecedented pressure from the Trump administration to avoid rate cuts, but markets and data are calling the tune.
Rate cuts will ease the pressure on US markets and stimulate an already warm economy. This week US GDP growth should confirm this. The US Dollar rallied, forcing the EUR back to 1.1650, while the GBP surrendered 1.3500.
The stronger reserve ensured the AUD did not regain 0.6500, while the NZD was steady around 0.5850. Local markets will keenly await the RBA minutes today, ahead of key inflation data, set to be released tomorrow.
About Callisto: The B&C 42 yacht, representing the Royal New Zealand Yacht Squadron (RNZYS). Was part of the revived Admiral’s Cup campaign in 2025, sailing alongside another RNZYS boat named Caro. In the AC2 (40fter) fleet at the Admirals' Cup, Callisto performed strongly taking line honours in its division from Jolt6, although it dropped to fourth on corrected time (handicap). Callisto's crew included America’s Cup legend Dean Barker.
Aug 25: USD tanks after Fed Speech
US Federal Reserve Chairman Powell set markets on fire Friday, finally accepting the need to cut rates, buckling under enormous pressure from President Trump.
The speech was the keynote address to the Jackson Hole Central Banker Symposium and seemingly accepted economic conditions now demand rate cuts.
It will not save his job, as ‘too late’ lives up to the Trump nickname, with his approach probably based on political ideology.
The US Dollar tanked, with the EUR busting through 1.1700, while the GBP topped 1.3500.
The falling reserve allowed some recovery of the commodity currencies, with the AUD heading back towards 0.6500, while the NZD regained 0.5850. This coming week will be dominated by global growth and inflation data, with the European lack of growth explaining the stunted inflation. US growth should be strong, while inflation is likely to confirm Powells ‘conversion’.
About Varuna IV/6 (above): Varuna IV, a Ker 56 yacht owned by German sailor Jens Kellinghusen, competed in the 2025 Rolex Fastnet Race under the name Varuna 6. Designed by Jason Ker, the Ker 56 is renowned for its high-performance offshore racing capabilities. In the 2025 race, Varuna 6 was a strong contender in the IRC Zero class, closely trailing the Australian yacht Whisper. The crew included experienced sailors such as Volvo Ocean Race veteran Roberto 'Chuny' Bermudez de Castro. Varuna 6's performance was particularly notable in the downwind leg after rounding the Fastnet Rock, leveraging its design strengths to close the gap on competitors - rolexfastnetrace.com.
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