US debt downgrade brushed aside by investors

Chris Beauchamp IG

The latest US debt downgrade has failed to put much of a dent in the stock market rally, says Chris Beauchamp, Chief Market Analyst at online trading platform IG.

Stocks shrug off Moody’s downgrade

Older hands in this market will remember when downgrades of US debt meant something, at least for a day or so. Moody’s Friday night downgrade of the US completes the trio of ratings agencies, but it does feel like a stable door, horse bolted moment given how little new information the news provides. Early trading on Wall Street suggests that it hasn’t deterred the headlong rush back into US equities, which continue to defy the doubters with their post-April rebound.

Pound rises against the dollar

Given the Moody’s news and the EU-UK deal it’s hard to disentangle dollar weakness and sterling strength today. The deal should help to smooth the way to better economic ties, businesses preferring better access even if the UK has had to make significant concessions. It is yet another signal of how Trump’s abrasive approach continues to upend the global order.

Author

Chris Beauchamp

EUR/USD climbs to daily highs on US CPI

EUR/USD now accelerates it rebound and flirts with the 1.1880 zone on Friday, or daily highs, all in response to renewed selling pressure on the US Dollar. In the meantime, US inflation figures showed the headline CPI rose less than expected in January, removing some tailwinds from the Greenback’s momentum.

GBP/USD clings to gains above 1.3600

GBP/USD reverses three consecutive daily pullbacks on Friday, hovering around the low-1.3600s on the back of the vacillating performance of the Greenback in the wake of the release of US CPI prints in January. Earlier in the day, the BoE’s Pill suggested that UK inflation could settle around 2.5%, above the bank’s goal.

Gold: Upside remains capped by $5,000

Gold is reclaiming part of the ground lost on Wednesday’s marked retracement, as bargain-hunters seem to have stepped in. The precious metal’s upside, however, appears limited amid the slightly better tone in the US Dollar after US inflation data saw the CPI rise less than estimated at the beginning of the year.