The European markets broadly held onto their post-ECB gains from Thursday, while the pound and euro wilted in the face of the dollar’s strength.
Opening almost unchanged at 7780, the FTSE is teasing a fresh 3 week high, and could well strike 7800 if things go its way this Friday. But it appears that losses in its commodity sector are preventing the UK index from indulging in the sight of a weakened pound.
Not only benefiting from Wednesday’s Federal Reserve rate hike, but the lack of interest rate discussion from the ECB on Thursday, the dollar continued to flout its dominance on Friday. The greenback took another half a percent off the pound, forcing cable to a sub-$1.322 intraday low not seen since the end of May, while chomping off another 0.3% chunk from the euro, leaving the single currency at a similar 2 week-plus nadir.
This growth came despite the news that Donald Trump is set to push ahead with tariffs on $50 billion of Chinese imports. The dollar may be taking some comfort, however, from the slightest sign of progress, i.e. the fact the list of product categories is expected to be cut from 1300 to just 800.
The FTSE’s lack of momentum came despite a 2% rise from Tesco (LON:TSCO), following the super-sized supermarket’s Q1 results. For the 13 weeks to 26th May the firm posted a better than forecast 2.1% rise in UK like-for-likes – a slight decline on Q4’s 2.3% increase, but not bad given the period includes March’s Beast from the East blighted trading. Group like-for-like sales, meanwhile, were up 1.8%, cementing a tenth consecutive quarter of comparable growth and allowing Tesco to hit a fresh near 4-year high.
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