FTSE 100 pressured while Dollar softens ahead of the Fed

Chris Beauchamp IG

The FTSE 100 has been hit by a darkening outlook for the UK economy thanks to the possible return of inflation, while the dollar is lower against a host of its peers ahead of the Fed decision, says Chris Beauchamp, Chief Market Analyst at online trading platform IG.

Wall Street steady, but FTSE 100 fails to rally

Stock markets in the US have made some small gains this afternoon as the positive reaction to Trump’s victory persisted into a second day. Meanwhile it was turnaround Thursday for the Dax, which shrugged off yesterday’s tariff-related panic and the political developments in Germany to enjoy a healthy surge. The long-suffering FTSE 100 enjoyed no such bounce, weighed down by the surge in sterling and a gloomy reaction in a number of consumer-focused stocks. Investors are fretting that the UK’s cloudy outlook is returning, and that inflation will make a return early next year.

Dollar falls back ahead of Fed decision

In FX markets the dollar unwound some of its reaction to the Trump win, the greenback shedding ground across the board. The BoE decision, sandwiched between the election and the Fed decision, was only a minor factor in sterling’s strength versus its US cousin. Instead, and for weeks to come, it will be about the dollar and the potential impact of the new administration’s policies.

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Chris Beauchamp

EUR/USD climbs to two-week highs beyond 1.1900

EUR/USD is keeping its foot on the gas at the start of the week, reclaiming the 1.1900 barrier and above on Monday. The US Dollar remains on the back foot, with traders reluctant to step in ahead of Wednesday’s key January jobs report, allowing the pair to extend its upward grind for now.

GBP/USD hits three-day peaks, targets 1.3700

GBP/USD is clocking decent gains at the start of the week, advancing to three-day highs near 1.3670 and building on Friday’s solid performance. The better tone in the British Pound comes on the back of the intense sekk-off in the Greenback and despite re-emerging signs of a fresh government crisis in the UK.

Gold treads water around $5,000

Gold is trading in an inconclusive fashion around the key $5,000 mark on Monday week. Support is coming from fresh signs of further buying from the PBoC, while expectations that the Fed could turn more dovish, alongside concerns over its independence, keep the demand for the precious metal running.

Crypto Today: Bitcoin steadies around $70,000, Ethereum and XRP remain under pressure

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Japanese PM Takaichi nabs unprecedented victory – US data eyed this week

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Ripple exposed to volatility amid low retail interest, modest fund inflows

Ripple (XRP) is extending its intraday decline to around $1.40 at the time of writing on Monday amid growing pressure from the retail market and risk-off sentiment that continues to keep investors on the sidelines.