The FTSE was up 0.40% in early trading this morning following comments from US Federal Reserve Chairwoman, Janet Yellen yesterday supporting continued gradual interest rate increases.
The dollar had picked up momentum this week as elevated bullishness from the Federal Reserve raised expectations of a December rate hike which were re-affirmed by Janet Yellen who reiterated her bullish outlook over the economy with yesterday’s comments. ADS Securities analyst, Konstantinos Anthis commented “The head of the Fed suggested that an accommodative policy for an extended period of time would be negative for the economy and mentioned that a steady rate hike pace would be the correct path forward”
These comments only aided the Dollar’s momentum against the Pound and Euro which, in turn, helped to lift the FTSE 100 which contains exposure to international businesses and exporters, while over in the Eurozone, the DAX and CAC rose 0.3% and 0.2% respectively.
Over in the US, equity markets finished mixed once again as a Technology sector rebound boosted the Nasdaq and the S&P 500, while the Dow Jones slumped to its first 4-day losing streak since June. Accendo Markets analyst, Mike van Dulken noted “In a cautious session, losses for McDonald’s outweighed gains for Apple on the closely watched 30-stock index, while Technology stocks enjoyed strong performances after Monday’s worst session since mid-August.”
Looking ahead to this afternoon, US President Donald Trump is expected to announce significant plans to cut taxes for corporations and individuals. Konstantinos Anthis commented “…investors will want to hear a concrete list of actions rather than another ‘wish list’. The dollar has been gaining since the beginning of the week with the index trading near its monthly highs; if President Trump confirms expectations today and delivers a comprehensive tax overhaul plan the US currency will extend its gains.”
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