The week’s data, and subsequent Bank of England rate-hike uncertainty, continued to weigh on the pound this Wednesday.
A week with a 3.0%, 5 year high inflation reading should have been a dream for the pound. Yet what could have been relatively straight forward rate rise for Mark Carney and co. has been consistently complicated by the UK’s wage growth issues, with the most recent assessment having real wages down 0.4% year-on-year. Tomorrow’s retail sales data is unlikely to provide any hawkish ammunition either; analysts are expecting a sharp drop from 1.0% in August to -0.1% in September, suggesting a further squeeze on consumer spending.
Sterling dipped 0.2% against both the dollar and the euro as the day went on, pushing it towards a one week low against the former while taking it below €1.12 against the latter. This gave the FTSE the green light to climb towards 7550, though the UK index is yet to substantially break through that resistance level.
Elsewhere the Dow Jones was in full flight this Wednesday, surging another half a percent to hit 23100 for the first time in its history. The increasing likelihood of a Fed rate hike in December has had no effect on the Dow, or its S&P 500 and Nasdaq peers, with the index climbing more than 600 points since the start of October.
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