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.