After a solid morning the pound lost its way this Wednesday afternoon, as the latest US ISM manufacturing PMI smashed expectations.
Coming in at a 3 month peak of 59.7 against the 58.1 forecast and the 58.2 seen in November, the ISM reading joins yesterday’s Markit PMI in suggesting the US manufacturing sector had a very strong end to 2017. This news helped lift a previously flagging dollar, with the greenback taking 0.7% back off the pound and 0.4% off the euro, allowing the currency to ease, if in no way erase, its recent woes. The Dow Jones wasn’t particularly fussed by the dollar’s rebound, given how far it has to go before it recovers the last fortnight’s losses, with the index climbing 70 points to once again tease 24900.
With the pound running out of steam against the dollar, while also dipping 0.3% against the euro, the FTSE could stretch its legs a bit this Wednesday. The UK index climbed more half a percent as the day went on, aided not only by sterling’s slip but by the Next-led gains in the retail sector and the beefy growth seen by BP (LON:BP) and Shell (LON:RDSa) as Brent Crude crossed $67 per barrel off the back of the anti-government protests in Iran.
Despite the euro’s bounce against the pound, its losses against the dollar were enough to buoy the European indices. The DAX surged 1.2%, allowing the German index to recross 13000 for the first time in 2018, while the CAC rose 1.3% to near 5350.
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