Traders remained unperturbed by the escalating threat of a trade war between the US and China on Wednesday, as US stocks remained within touching distance of record highs.
The release of the latest consumer price inflation (CPI) data pushed the pound over $1.32 for the first time since July until UK Prime Minister Theresa May suggested that she would reject a revised offer from EU chief negotiator, Michel Barnier, on the issue of the Northern Ireland border.
Mr Barnier said on Tuesday he was “ready to improve” his plan that would ensure no return to a hard border between Northern Ireland and the Republic if EU-UK talks on a future trade deal failed to find a solution.
Oil prices rallied following news that US crude inventories last week fell to their lowest level since February 2015.
Sterling remained flat on the day, reaching $1.3213 before shedding 116 points to $1.3097. It recovered slightly late in the afternoon, last trading at $1.3142. The euro gained 10 points against the dollar to settle at $1.1675.
In New York, the S&P 500 was up 2.7 points to 2,907, having retreated from the day’s earlier high of 2,912.36. In London, the FTSE 100 gained 30 points, or 0.4%, to reach 7331.12 at the closing bell. The DAX was also up by 61 points in Frankfurt to 12,219.02, while the Dow Jones Industrial Average gained 158 points to reach 26,405.76 – its highest level since January. Shares in Microsoft fell by 1.3% amid uncertainty over its shareholder dividend increase, seeing the NASDAQ slide by 6 points to 7950.04.
The news that US crude inventories fell by 2.05m barrels last week saw Brent Crude rest at $79.40 a barrel, slightly down from $79.50 earlier in the day. Gold, aided by a softer dollar, rose by $6 to reach $1,203 per ounce.