GBP springs to life; FTSE wrestles with record peak
|The pound has been hit by a wave of selling in the latter part of the morning session after beginning brightly. Sterling is now fairly mixed on the day after earlier rising to its highest level of the month against the US dollar. The FTSE 100 made a record closing high last night at 7556 but has dipped since the open and currently trades around 15 points lower.
Brexit developments whipsaw the pound
The month so far has been far quieter for the pound than September but the past 24 hours have seen signs that heightened volatility could be set to return. Talk of a “deadlock” following the conclusion of the latest round of Brexit negotiations saw a quick swoon lower in sterling before a swift reversal occurred amidst rumours that the EU may be willing to extend an olive branch to the UK in the form of accepting a transitional period beyond the current March 2019 deadline.
This saw the pound end higher yesterday and these gains were extended this morning before comments from Germany, in which a government spokesman said it’s too early to discuss any transition ideas, led to another move lower. The market is highly sensitive to these rumours and counter-rumours at present with there being 3 occasions in the past 24 hours where a comment has caused an almost immediate reaction in the pound. Despite these short term fluctuations the pound remains not far from its highest levels of the year and is also higher against all its major peers over the past week, but there remains a high degree of susceptibility to drops on any adverse political developments.
FTSE looks to end the week on a high
The FTSE 100 is on course to post a fourth consecutive weekly gain with the fears surrounding the fairly sharp declines seen last month receding to the back of investors minds. The fluctuations in the pound have been felt in the stock market but the benchmark is making steady gains against a positive global backdrop for stocks with the past week seeing the German Dax join its US equivalents in making new all-time highs. An apparent de escalation of the recent Catalan independence drive has helped the Spanish IBEX to recover last week’s losses whilst the Nikkei 225 has also risen with the Tokyo stock market hitting its highest level since 1996.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.