The pound continued to stumble over every obstacle placed in its way this week, the currency falling following a disappointing – if expected – inflation reading.
Hot on the heels of Monday’s manufacturing mishap and Tuesday’s stagnant wage growth, the CPI figure for May came in at 2.4%, giving sterling’s already slender hawkish hopes another kicking. The pound fell 0.2% against the dollar, and is at an 8 day nadir just above $1.334, while against the euro it shed 0.4% to near the same €1.133 intraday lows struck in the last couple of sessions.
This allowed the FTSE to reverse its own early losses, the UK index setting aside Just Eat's (LON:JE) Deliveroo-spooked 9.5% plunge to climb back above 7700 with a 20 point rise. The eurozone were also a bit more positive as the day went on, with the DAX out of the red and up 0.2%.
Looking to this afternoon and the Dow Jones is set to continue to lurk around 25300, with the futures pointing to a meagre 0.1% increase after the bell. The Dow’s reticence is likely linked to Wednesday’s Fed meeting, one that has a 96.3% chance of Jerome Powell raising interest rates according to the CME Group. Given how heavily signalled the hike has been it shouldn’t cause too many problems for the Dow; instead it may just act as a momentum capper, preventing the index from building beyond its current 3 month highs.
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