As investors start to eye the central bank shindig in Jackson Hole, the pound decided to reign in the enthusiasm it displayed on Thursday.
Perhaps concerned that yesterday’s surge was a tad overdone – after all, all Macron and Merkel did was make positive noise about a deal; nothing more substantial than that was announced – sterling slipped 0.4% against the dollar and 0.3% against the euro. And while, yes, it still means the currency has had a decent couple of weeks, in the wider context of the last few months it remains deeply troubled.
Thanks to a combination of a broader market rebound, and the pound’s early retreat, the FTSE managed to reclaim 0.8% after the bell, pushing back towards 7170 but so far missing out on the week’s 7200-plus highs. The DAX similarly rose 0.7%, once again crossing 11800, while the CAC’s 0.6% increase put the French bourse above 5400.
Friday’s main event appears to be a 3pm speech, titled ‘Challenges for Monetary Policy’, from Jerome Powell in Jackson Hole. How broad-strokes the talk will be is unclear; nevertheless, investors will be going over the comments with a fine tooth comb in order to ascertain the Fed’s direction ahead of September’s meeting, and beyond.
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