Tuesday’s a bit of a buffer day, with little for the markets to process beyond speculation surrounding tomorrow’s Fed meeting.
Having pushed towards 7250 during yesterday’s trading the FTSE immediately slipped back after the bell, dipping 0.2% to prevent it from gaining any momentum. The eurozone indices were the same, with both the DAX and CAC dropping by 0.2% apiece to undo a decent chunk of Monday’s growth.
The European indices’ fall can be traced back to the respective performances of the pound and the euro against the dollar. Both currencies are up 0.3% to 0.4%, keeping cable above $1.35 after a bit of a dip on Monday, while allowing the euro to nudge ever closer back towards $1.20.
While the Fed is almost guaranteed to announce the start of its balance sheet reduction at Wednesday’s meeting, its stance on interest rates is less clear, leading some to argue that the dollar is only going to be disappointed when tomorrow’s get together fails to provide any further clarity. It seems to be those concerns weighing on the currency this morning, though it should be noted that the dollar-yen is nearing an 8-week peak.
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