There was a slight improvement from sterling as Friday went on, thanks to a hawkish rebuke to Carney’s Thursday dovishness from MPC member Michael Saunders.
Saunders, who actually voted for a hike in March, argued that a ‘gradual’ increase in interest rates should not be read as ‘glacial’, nor does it mean that rates are raised just once a year. However, the pound-boosting potential of these comments was tempered by the fact that a) this wasn’t some dove-to-hawk switch given Saunders’ stance last month, and b) he doesn’t feel that ‘the exact timing of rate changes must be totally predictable or signalled in advance’.
Still, sterling found some solace in Saunders’ words. Against the dollar it reduced today’s losses to just 0.1%, allowing cable to sneak across $1.405, while it actually rose 0.2% against the euro, jumping back above €1.143. The meagreness of this turnaround compared to the losses seen since Monday’s highs, however, meant the FTSE was free to rise half a percent, holding at a 7360-plus 11 week peak.
Turning to the US open and there’s not a lot to get excited about. The Dow Jones is set to drop 30 or so points when the bell rings on Wall Street, the index continuing to stall following the one month-hitting highs seen in the first half of the week.
Disclaimer: Spreadex provides an execution only service and the comments above do not constitute (or should not be construed as constituting) investment advice or recommendations, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any person placing trades based on their interpretations of the above comments does so entirely at their own risk. Spreadex Ltd is a financial and sports spread betting and sports fixed odds betting firm, which specialises in the personal service and credit area. Founded in 1999, Spreadex is recognised as one of the longest established spread betting firms in the industry with a strong reputation for its high level of customer service and account management.
In relation to spread betting, Spreadex Ltd is authorised and regulated by the Financial Conduct Authority. Spread betting carries a high level of risk to your capital and can result in losses larger than your initial stake/deposit. It may not be suitable for everyone, so please ensure you fully understand the risks involved.