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Pound Edges Higher As FTSE Treads Water

Published 26/09/2017, 11:46
Updated 18/08/2020, 10:10

Sterling has appreciated today with small gains shown against most of its peers whilst the FTSE 100 is back at 7300 and flat on the day.

Sterling hits 2-month high vs the Euro

Politics remains a key driving force in sterling pairs, although the most notable recent moves have occurred due to elections in Germany and New Zealand rather than domestic events. The gains seen in the pound today have caused the GBPEUR to rise to its highest level since mid-July. The rise has been driven more by Euro weakness rather than pound strength with Monday marking the worst day of the year for the single currency as the markets reacted negatively to the outcome of the German election. Elsewhere, there has been a substantial rise seen in the pound against the New Zealand dollar with the latter coming under more pressure following the weekend’s indecisive election result and a sharp drop seen in the most recent business confidence index has added to the woes for the Kiwi.

Oil price hits highest level since summer 2015

Crude oil enjoyed a strong rise during the first trading session of the week with Brent moving to its highest level in more than two years and back above $59 per barrel. Since the international benchmark hit a low in June, despite the extension of OPEC supply cuts, the market has taken off, rising in excess of 30%. The latest surge was likely due to comments from Turkish president Erdogan who threatened to oppose an independence referendum in Iraqi Kurdistan and block approximately 550k barrels per day of landlocked Kurdish oil. Initial results suggest that the vast majority of Iraqi Kurds support the Kurdistan independence from Iraq and should they prevail in today’s referendum, and Mr. Erdogan block the exports, then a substantial cut in supply will be seen. The developments have been keenly felt in London with Royal Dutch Shell (LON:RDSa) and BP (LON:BP) both rising in early trade. easyJet (LON:EZJ) shares have taken off this morning with the budget carrier rising by over 2% to sit atop the blue-chip leaderboard after news that it has submitted a bid for parts of the insolvent Air Berlin has been warmly greeted by investors.

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