A remarkable performance from sterling, pumping +1.5% higher to $1.4226 (3.45pm) today. The pound got support from a positive UK jobs update though, as stated before, the pound’s performance is more about a battered dollar than out-and-out robust sentiment for sterling.
Indeed, the US government managed to give a few head-kicks to the dollar over in Davos: Treasury Secretary Steve Mnuchin told a press conference that an enfeebled US currency was marvellous news for US trade (though most US administrations usually equate a strong economy with a strong dollar).
Such comments can only open the gate wider for further dollar falls. Or perhaps President Trump can further clarify the strategy when he turns up to Davos on Friday in person. Either way, Société Générale has pencilled in a further -10% dollar slump against the euro and yen.
Sterling was not just thumping the dollar but managed to push hard against the euro, surging +0.91% to 1.1486. The export-reliant FTSE 100 slithered 88 points in response; the biggest faller was Sage Group, down -6.5% though London Stock Exchange Group surged +5%.
- UK FTSE 100 7,643.43 -1.14%
- DAX 13,531.43 -0.21%
- CAC 40 5,514.94 -0.37%
- Euro Stoxx 600 402.13 -0.17%
- Dow 26,380.69 +0.64%
- S&P 500 2,852.31 +0.46%
- Nasdaq 7,482.42 +0.30%
- Nikkei 225 24,124.15 +1.29%
- Gold 1,358.60 +1.26%
- Oil WTI 64.70 +0.37%
Gold price shines but not for silver – yet
The price of gold is edging close to its highest level for almost 18 months. Earlier this afternoon gold was trading at $1,353 helped by more unwinding dollar weakness and Steve Mnuchin’s Davos (see above) comments.
“The greenback will remain a key driver of sentiment for traders of the yellow metal ahead of President Trump’s visit to the World Economic Forum in Davos on Friday,” Accendo Markets told the FT.
However ever-poorer relation silver has not shone so brightly thanks to more trade tariffs on solar cell imports. But the momentum is clearly with the yellow metal, though the silver tension remains. If the global economy continues to pick up, this relationship must surely change. A new floor for silver?
WH Smith sales slip but travel positive
Earlier high street stalwart WH Smith reported weaker sales again. High Street stores slumped -5% for the 20 weeks to 20 January. But there was much better news from WH Smiths’ travel arm with like-for-like sales rising +3% pushing total sales up +7% higher.
Boss Stephen Clarke says strong growth from airport stores over Christmas helped plus a recently opened new concept store in Gatwick South “has performed particularly well and is ahead of plan”.
WH Smith says it expects full year cost savings to be in the region of £12m, “slightly ahead of target”. Despite the mixed news WH Smith has been a fine play for investors in the last 12 months, up more than +42% though it has trod water in the last quarter.