The FTSE 100 is trading marginally lower by around 8 points at the time of writing as the leading UK stock index searches for direction after a sizable gain so far this week. GBP remains under pressure and despite more upbeat data on the UK economy this morning the currency looks vulnerable to extend recent declines.
Gold stocks rise on FOMC minutes
Shares that are sensitive to the price of gold are amongst the best performers in London this morning with Fresnillo, Randgold Resources and Antofagasta Holdings all gaining more than 1% after the release last night of the minutes from the latest FOMC meeting. The US rate-setting body decided to keep rates on hold at <1.25% at their July meeting and after two rate hikes so far this year and the earlier announcement of an imminent balance sheet reduction the most recent discussion amongst members seemed to err on the dovish side. Gold futures have rallied back near last week’s high despite the cooling of US-N.Korea tensions and they are currently within striking distance of year-to-date highs.
UK retail sales beat forecasts but fails to boost GBP
For the second day running the pound has received a positive boost from an economic release, however just like on Wednesday it has failed to sustain a rally. Retail sales figures for July showed a 0.3% month-on-month increase which was marginally higher than the 0.2% expected and in line with the prior reading, which experienced a downward revision from 0.6% previously. There was a small move higher in sterling immediately after the release but once traders digested the revision lower the move was pared and the GBP remains close to its 1-month low against the USD - despite USD weakness following the FOMC - and not far from its lowest level since last October against the Euro.
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