An unexpected surge in UK wage growth allowed the pound to stick its fingers in its ears and continue its precarious rebound on Tuesday.
Despite Brexit perhaps being at Peak Uncertainty – as Theresa May attempts to woo EU leaders, despite Donald Tusk, and now Jean-Claude Juncker, stating that there is ‘no room for negotiation, the vultures are circling her tenure as Prime Minister – the pound has so far avoided a return to Monday’s lows.
Helping keep the currency in the green was the latest jobs report, one that was notable for the average earnings index, including bonuses, hitting a decade high of 3.3%. Off the back of this news sterling expanded its gains to half a percent against the dollar, causing cable to rise back above $1.262, while reclaiming 0.2% against the euro, lifting it to €1.108.
As for the FTSE, it followed in the footsteps of its Eurozone peers. The UK index managed to just about re-cross 6800 as it rose 1%; in comparison the DAX and CAC were up 1.7% apiece, celebrating a pair of far between than forecast German and region-wide ZEW economic sentiment readings.
Turning to the US open and the Dow Jones is set to be on the FTSE-end of Tuesday’s gains, with the futures suggesting a 0.9% increase after the bell. Yesterday saw one of the Dow’s big swings, from sub-23900 intraday lows to a 24400 close, so it’ll be interesting if it is slightly more stable this afternoon.
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