While the pound overcame its lunchtime wobble against the euro, it had no such luck against the dollar, in large part thanks to a solid inflation data from the US.
Though, at 0.2%, the latest core PCE price index still leaves the annual rate at 1.5%, below the Federal Reserve’s 2% target, the greenback continued its comeback this Monday. The dollar took 0.6% off the pound, keeping cable the wrong side of $1.41, while against the euro it rose half a percent, pushing the single currency to a 5 day low.
The Dow Jones wasn’t too happy with the dollar’s rebound, dipping 60 points when the bell rang on Wall Street. The index has earned a break, however, given that it crossed 26600 to set yet another record high last Friday. As for the European indices, the FTSE couldn’t squeeze much juice from sterling’s losses, with the UK index up a mere 0.1%; the DAX and CAC, meanwhile, were flat at 13330 and 5530 respectively.
The markets will want to enjoy the relatively clear trading while they can. From Tuesday onwards the week has a bombardment of economic news for investors to try and parse, including Donald Trump’s State of the Union address, the first Federal Reserve meeting of 2018, the global manufacturing PMIs, a Non-Farm Friday and a string of updates from the world’s biggest companies, including Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN) and Facebook (NASDAQ:FB). That’s a lot to process, especially for the dollar, which may face a battle to hold onto its fragile turnaround.
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