The most interesting aspect of trading this morning is that while the DAX and CAC have both built on yesterday’s highs, rising 0.3% and 0.2% respectively, the euro has also risen to a 3 week peak against the dollar, approaching the $1.08 mark in the process. That perhaps suggests investors are expecting the ECB to extend its QE programme, but with Draghi leaving the door opening to ‘tapering’ at some point in 2017.
While the euro has had some success against the dollar, it has shed 0.2% against the pound, with sterling also taking half a percent off of the dollar. The currency is likely just recovering from yesterday’s losses, when weak manufacturing production data and the confirmation of a March 2017 invoking of Article 50 weighed on the pound. Sterling’s rise has helped cap the FTSE’s gains, with the UK index rising a mere 0.2% as the day went on.
Looking ahead to the US open and the Dow Jones is set to open not far from yesterday’s fresh record high. Wednesday saw the index surge all the way above 19500, climbing nearly 300 points in a single session. It was one of the Dow’s best days of trading since the US election, with investors continuing to bank on some kind of stimulus when Donald Trump takes office next year.