Pound surges after CPI while tech stocks head lower

Chris Beauchamp IG

Today saw a one-year high for the pound against the dollar, while on Wall Street tech stocks are still being sold in favour of recent laggards in the small-cap space, says Chris Beauchamp, Chief Market Analyst at online trading platform IG.

FTSE 100 rises despite CPI disappointment

“Hopes of an August rate cut have dimmed, and while this initially put the FTSE 100 on the back foot this morning, the index has managed to get back into positive territory. UK investors are digesting the impact of the King’s Speech, which has boosted expectations of a more vibrant British economy."

"The pound surged through the $1.30 barrier today following the inflation reading, and is well on course to reach last July’s highs at this rate.”

Tech stocks keep falling

“While today’s Dow and small-cap gains are but a shadow of recent surges, tech stocks are still firmly out of favour, partly thanks to the selloff in TSMC overnight, and no doubt on some pre-earnings nerves. The Magnificent 7 are widely expected to give way to the ‘other 493’ this time around, as investors finally lose some of their enthusiasm for the big names."

"The Fed has been keen to pour cold water on overeager expectations on rate cuts, the NY Fed’s Williams being out and about today saying that July was too early for a rate cut, but he left the door firmly open for a September move.”

Author

Chris Beauchamp

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.