FTSE rallies on Feds signals

The Fed’s decision to keep interest rates unchanged and comments suggesting that rates cuts are not as imminent as the market has expected have helped the FTSE and European markets into a much stronger position Thursday. The DAX gained close to 0.9% helped also by a rally in Asia while the FTSE made a more modest gain of 0.30% led by miners, industrials and airlines.

Dollar in decline as Trump ponders Powell’s removal

The dollar had already started sliding after the Fed’s rate decision Wednesday but reports that President Trump is considering removing Fed chairman Jay Powell have put the greenback under yet more pressure. This has worked in favour of the pound which has been on the back foot for weeks, helping sterling rally back above $1.27.

The BoE session today is also playing a role in the pound’s recovery as the central bank is expected to hold rates steady but reinforce its message that it will raise them later this year. Although the UK economy has practically ground to a halt the argument for higher rates is supported by a very fast growth in wages.

Brent crude is trading back above $63 ahead of OPEC’s meeting in Vienna at the beginning of July. Member countries are working towards extending the oil output cuts that are currently in place despite signs that the US market is well stocked.

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.