The prospect of political progress in Germany buoyed the euro on Friday afternoon, while the dollar continued to move lower.
The news that Angela Merkel and her CDU-CSU party are set to meet with their former Social Democrat coalition partners acted as a pick me up for the euro, which surged 0.6% to a 2 month high against the dollar, while taking another 0.3% off the pound, pushing sterling to its worst price in more than a week. These gains took the edge off the DAX’s own growth, with a 1% lunchtime surge halving to 0.5%; still, this keeps the German index above 13000, a level its struggled with for the past few sessions.
As for the dollar, its drop against the euro was joined by a 0.4% decline against the pound, with cable climbing above $1.335 to hit its best price since the start of October. There are a few things dragging the greenback lower: a pair of weaker than forecast flash manufacturing and services PMIs; Wednesday’s cautious Fed meeting minutes, which cast doubt not on a December rate rise, but the pace of any subsequent hikes; and a series of bearish notes from analysts, including those at Nomura and Morgan Stanley (NYSE:MS). Add on a Thanksgiving hangover and it was a grey Black Friday for the currency.
The FTSE, meanwhile, continued to trail its peers – not just the eurozone, but the Dow Jones, which rose 0.2% after the bell – dipping 0.1% as the day went on. Multiple times this year the UK index has got trapped around the 7400 mark, with the FTSE facing a momentum-less run in to Christmas.
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