FTSE100 Focus: FTSE fights off ECB-inspired GBP strength

The FTSE100 has extended its bounce above 7700 thanks to a weaker USD benefiting metals and Oil and thus Miners, and Energy.

FTSE100 Focus: FTSE fights off ECB-inspired GBP strength

The FTSE100 has extended its bounce above 7700 thanks to a weaker USD benefiting metals and Oil and thus Miners, and Energy. General risk appetite also sees the Banks off their lows as the fears of late recede (Italy, Spain, Trump, trade) with the aggregate being more than enough to overpower unhelpful GBP strength which has a negative transnational impact on both foreign-earned profits and dividend income. From where does this GBP strength hail? Hawkish comments from ECB members helping the EUR outperform vs major pairs. With the single currency making up 57% of the widely watched trade-weighted Dollar index, this is keeping downward pressure on the US currency, in turn helping the UK’s Sterling. Contributors: FTSE +40pts, driven north by the RIO/GLEN/AAL/BLT (weaker USD, metals like Copper up), BP/RDSB (Brent crude off lows), Banks (risk appetite, rebound from lows) and IAG (bounce from channel floor, oil off highs). Offering limited resistance are the usual suspect defensives BATS/ULVR/IMB/GSK/RB all hurting from GBP strength. Technicals: The FTSE100 has broken out from its 3-day falling channel. Bulls need a break above 7730Bears require another break below 7700

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Categories: Analysis, News
Tags: FTSE 100

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