Overall gains are limited as the week draws to a close in London, with the FTSE 100 ten points higher and the Dow edging back from opening highs. 

Equities are finishing the week on a positive note, as investors look forward to the upcoming ECB and Fed meetings. The day has seen rapidly evolving expectations of what the Fed might do next, as officials sought to play down a speech that seemed to suggest dramatic action was round the corner. John Williams may well have been speaking ‘academically’, but the timing is too convenient for it to be viewed as anything more than a hint about what the Fed will do next. Meanwhile, the ECB is gearing up for its next meeting, and here the case for action is even more pressing than in the US. A failure to act now would hit investor sentiment hard, prompting drops in European equities that are  already vulnerable to further declines. Worryingly for the FTSE, it has been unable to hold its gains over the past few days, with a similar situation prevailing in European indices. A boost from the Fed and the ECB would help revive flagging sentiment, especially as we approach the thin August period. 

After leaping higher yesterday, GBPUSD has reversed to an extent. Next week is almost certain to see Boris Johnson ascend to the premiership, promising more upheaval for the UK and EU. Signs point to increased instability if the new government attempts to push for a ‘no deal’ outcome, suggesting that the Johnson government could be the shortest administration in recent memory, as this could spark a full-blown rebellion among soft-leave and Remainer Conservatives.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD surges above 1.1100 as Trump announces steps against China

EUR/USD is trading above 1.1100, up on the day. President Trump said he orders companies to search Chinese imports for drugs. Earlier he criticized Powell's lack of action. 


GBP/USD jumps above 1.2250 on USD weakness

GBP/USD is trading close to the monthly highs above 1.2250 as the US dollar falls following Powell's hint of cutting rates and Trump's angry response. 


USD/JPY plummets to ten-day lows below 106 as Trump goes berserk on Twitter

The USD/JPY came under strong selling pressure in the last hour and erased nearly 100 pips as US President Donald Trump's latest rant on Twitter forced investors to seek refuge and ramped up the demand for safe-haven JPY. 


Powell powerless against Trump's trade wars – US braces for recession, USD set to move

"The most powerful central banker in the world" – is how we and others characterize Fed Chair Jerome Powell. While that may be true – monetary policy is reaching its limits – especially in the face of a trade war.

Read more

Gold gains more than $30, eyes 2019 highs on Trump’s tweet

Gold continues to rise sharply amid concerns about the impact of the escalation in the US-China trade war. The demand for safe-haven assets emerged over the last hours, leading to a rally in the yellow metal. 

Gold News