By Connor Campbell, Financial Analyst, Spreadex
The bar has been set so low for the pound this week that the confirmation of a measly 0.3% Q2 GDP reading gave the currency a helping hand.
Investors clearly weren’t ready to take a look at the ins and outs of the GDP report – household spending growth is at its lowest since the end of 2014, while business investment plunged from 0.6% in Q1 to 0.0% in Q2. Instead ignoring all this cable climbed 0.1%, flopping back over $1.28, while against the euro the pound jumped 0.4%. As ever it is important to note that kind of growth barely begins to scratch the surface of the losses suffered by the pound against its eurozone peer this summer, with sterling still stuck under €1.09.
The FTSE wasn’t too bothered about sterling’s gains, itself pushing 25 points higher to remain above 7400. The eurozone indices, meanwhile, enjoyed the euro’s sudden softness – another reason to doubt the worth of the pound’s Thursday rebound – with the DAX and CAC both up 0.3% apiece.
Turning to this afternoon and the Dow Jones is looking pretty subdued, the futures pointing to a meagre 0.1% rise when the bell rings on Wall Street. Though it still a way off Monday’s 21600-tickling lows, the Dow did suffer a bit of a knock last night as investors reacted to Trump’s threat to shut down the government if Congress doesn’t fund his US/Mexico border wall. Any more outbursts from the President may further impact the index, especially since the afternoon is pretty uninspiring data-wise.
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