Strong pound fails to halt FTSE surge

Chris Beauchamp IG

Heading into the close the FTSE 100 is 30 points higher, while political developments have spurred rallies in the pound and the euro.

Merkel seems safe in her office once more
UK discovers new allies on the continent
Fresh record highs for UK & US

Currencies are all the rage this afternoon as the euro and sterling both gain on hopes of political developments in two key stories, namely the German coalition talks and the next round of Brexit negotiations. Last-ditch moves by the various parties in Berlin appear to have borne fruit, leaving Angela Merkel still in charge, albeit with her power diminished following her less-than-stellar election showing. Meanwhile, though the Commission proclaims the indissoluble unity of the 27, it has become increasingly clear this week that there are cracks in the edifice. Various member states have made noises about seeking a sensible post-Brexit partnership with the UK, and it looks like Madrid and
Amsterdam have broken cover to back a deal to minimise any disruption from the UK’s departure.

Even with renewed sterling strength the FTSE 100 has been able to clamber to a new high. Bullishness is rampant among investors, who appear to be tripping over themselves in a race to buy US and UK equities. Europe remains the unloved area, however, as markets begin to fret about a potential ramp-up in monetary tightening by the ECB. This is probably an exaggerated reading of yesterday’s minutes, but given the supreme dovishness of the central bank in previous years, any slight move of the monetary policy needle looks like a big deal.

Author

Chris Beauchamp

EUR/USD trims gains, hovers around 1.1900 post-US data

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GBP/USD comes under pressure near 1.3680

The better tone in the Greenback hurts the risk-linked complex on Tuesday, prompting GBP/USD to set aside two consecutive days of gains and trade slightly on the defensive below the 1.3700 mark. Investors, in the meantime, keep their attention on key UK data due later in the week.

Gold loses some traction, still above $5,000

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Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.

Dollar drops and stocks rally: The week of reckoning for US economic data

Following a sizeable move lower in US technology Stocks last week, we have witnessed a meaningful recovery unfold. The USD Index is in a concerning position; the monthly price continues to hold the south channel support.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash (BCH) trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.