Sterling rallies to 7-month high, stocks edge higher

Politics, more politics and then some technical buying have helped the pound hit the highest level in seven months against both the dollar and the euro.

Politics, more politics and then some technical buying have helped the pound hit the highest level in seven months against both the dollar and the euro. 

The dollar has been under pressure for several days now as the China US trade deal seemed to be slipping through their collective fingers, the notion confirmed yesterday after President Trump said that a deal may not happen until after the US elections in November 2020. 

During the same period the pound has been strengthening based on polls showing a likely Conservative win in UK elections later this month and finally after the markets opened in London sterling broke above the key $1.3 level. This spurred some technical buying this morning which was only capped after the release of the UK services PMI data showing that the sector has stopped growing for the last three months.

FTSE moves higher as China talks hang in the balance

Financial services firms traded higher bolstered by a stronger sterling while mining and metal groups also gained ground despite the latest crisis with US-China trade talks. 

Vodafone’s big news about cooperating with Amazon Web Services on computer and storage services on its network fell on deaf ears with investors and the stock declined 0.94%. This is in sharp contrast with French network operator Orange which rolled out its new five-year strategy which included higher earnings targets and potential plans for mobile tower operations.

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (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.