FTSE drops as trade hopes are dashed
Fiona Cincotta November 8, 2019 11:16 AM
The FTSE and European gauges were all in the red after a White House adviser dashed hopes of a quick US-Sino agreement. Markets have bounced this week on the premise of the US and China partially lifting tariffs on one another’s goods but Friday morning White House Director of Trade Peter Navarro poured cold water on that optimistic view saying that there was no agreement yet to remove any of the existing tariffs. Miners and British Airways parent IAG were the hardest hit, causing the FTSE to drop nearly 0.3%.
The euro moved in nano steps against the pound – a touch higher – and against the dollar – a touch weaker despite German export data showing a surprise increase in September.
The numbers can be interpreted as an indirect indicator of the state of the rest of the Eurozone because more than half of it is exported to member states. Other recent data shows marginal pockets of improvement in the European economy but far from enough to call a sustained trend. The view was echoed Friday by an ECB governing council member who said he expects that it will take a longer period of time for conditions to improve.
The pound is barely breathing against the dollar but there could be more volatility later in the day as election chatter intensifies. The SNP has just launched an election campaign based on what they call “escaping Brexit” and involves a promise of a second referendum on Scotland’s independence. The dollar is a touch higher against the safe havens as it has built in expectations of the China-US trade deal.
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