News that the UK’s second quarter growth doubled that seen in Q1, with the preliminary reading coming in at 0.4%, meant little to the pound on Friday.
With investors fleeing to the safe haven of the dollar, cable plunged 0.5% as the day went on, sporadically hitting levels not seen in over a year. And the thing is, the afternoon could make things worse for sterling, with July’s US inflation reading set to rise from 0.1% to 0.2%, a boost for the greenback ahead of September’s potential Fed rate hike.
As for the FTSE 100, the market-wide trade war fears sending the UK index 0.8% lower, forcing it under 7700 having almost hit 7800 earlier in the week. The Eurozone, itself embroiled in a trade spat with the UK, saw losses another leg up from those of the FTSE. The CAC fell below 5450 after dropping 1.1%, while the DAX was the worst performer of the major indices, shedding nearly 190 points to hit a one month nadir.
Looking to this afternoon and the Dow Jones isn’t about to ride to the rescue. The futures have the Dow dropping more than 100 points when the bell rings on Wall Street, a move that would force the US index to a sub-25400, one-week low.
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