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Dow Avoids European-Style Losses As Trump Says ‘All Options On Table'

Published 29/08/2017, 15:30
Updated 09/07/2023, 11:32

By Connor Campbell, Financial Analyst, Spreadex

The Dow Jones managed to avoid the kind of North Korea-inspired losses seen in Europe this Tuesday, in part because the dollar absorbed the brunt of the blow.

Having threatened a 120 point plunge earlier in the day, the Dow Jones ended up only falling by 40 or so points after the bell. That Donald Trump’s only comment so far in regards to North Korea has been that ‘all options are on the table’ – a slightly less chest-beating response than perhaps could have been expected – may have gone some way to reassuring US investors.

The Dow will have also benefited from the dollar’s own decline, even if the greenback’s losses have eased since the morning session thanks to a better than forecast CB consumer confidence reading. While the dollar is still down 0.3% against the euro, which has just about kept above $1.20, it has erased its drop against the pound, with cable now flat a smidge under $1.295.

None of this could help out the European markets. The FTSE remained down by 1%, informed by Brent Crude’s 0.7% slide and subsequent impact on BP (LON:BP) and Shell (LON:RDSa). As for the DAX and CAC, the euro’s continued gain against the dollar and the pound meant that their losses were ugly, the German and French indices diving 1.8% and 1.1% respectively.

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