The US open did little to shake things up this Tuesday, the Dow Jones et al. belatedly reacting to the weekend’s North Korea nuclear escalation.
The Dow fell 50 points after the bell, taking the index back below 21900; this despite the dollar also having a pretty poor day. While the currency managed to sit flat against the euro – which has its own ECB meeting-fears to deal with, causing it to pair its dollar-losses with a 0.4% decline against the pound – the greenback plunged more than half a percent against both the pound and the yen.
There are couple of reasons for this. Firstly, the dollar is processing the continued diplomatic aftershocks of North Korea’s latest missile test, sending investors running for havens like the yen and gold. On top of that it had to deal with an ugly factory orders reading, the figure falling from 3.2% in June to -3.3% in July.
With the pound given a get out of jail free card by the dollar and euro’s own issues, allowing the currency to ignore the 11-month low services PMI produced this morning, the FTSE could not avoid the red. And though the index was only down 20 or so points, this still took it back below 7400.
As for the eurozone indices, only the DAX could take advantage of the euro’s nerves, with the German index rising 0.3%. The CAC, on the other hand, dipped 10 points following a disappointing French services reading.
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