The Dow Jones got off to a miserable start on Monday, turning a sulky session into a full-on slump.
Continuing to unwind its post-midterms rise, the Dow fell 270 points after the bell, a move that sent the index back towards 25700. The main catalyst for this decline appeared to be a dominant dollar, which is still riding high on last Thursday’s relatively hawkish – and December rate hike-signalling – statement from the Federal Reserve. The greenback climbed 0.6% against the euro and 0.7% against the pound, forcing the former below $1.1445 while holding the latter’s head under $1.29.
Though not great, that 0.7% dip nevertheless sees cable off its intraday lows, with sterling at one point on Monday morning tumbling under $1.283. The slight easing of the currency’s losses – it has also largely erased its initial decline against the euro – comes despite no material improvement in the Brexit situation, with the chance of a summit with the EU at the end of November receding almost completely. And from Tuesday onwards the obstacles only start to pile up, with the classic wage growth/inflation/retail sales data relay.
As for the FTSE, its Monday journey wasn’t a pleasant one, dragged from a 7150-touching 0.6% climb to a 7080-hitting 0.4% slide by the souring effect of the US open, a smattering of notable losses in its banking sector, and British American Tobacco's (LON:BATS) nasty 9.5% plunge.
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