US dollar gains after three-day slide, FTSE opens flat

FTSE 100 opens flat, US dollar gains after three-day slide

The FTSE 100 index opened flat on Wednesday morning after stumbling a bit yesterday on weakness for BT shares, which declined 6% as its big client Sky signed a deal to offer broadband services via CityFibre.

The blue chips declined 1% on the back of this move but has stabilised this morning with basic resources offering some support as copper prices bounced off the 200-day SMA support. European bourses trade a little higher after Hong Kong’s tech sector led a drop in Asia. The run on Wall Street came to an end yesterday.

The S&P 500 and Nasdaq both snapped 8-day win streaks – a ninth would have been the best run since 2004. Despite the major wobble at the start of August, both indices are now up around 1% for the month. Meanwhile crude oil fell again with front month WTI testing $73 whilst gold rallied to fresh record highs yesterday above $2,500 before paring gains a touch overnight.

Sterling, euro pare gains vs. US dollar on Wednesday

Sterling and the euro pared gains against dollar early on Wednesday after a third straight day of strong gains on Tuesday. EURUSD rallied to 1.11 to test the Dec ‘23 swing high. A solid breach of this level could see a retest of the July ‘23 high at 1.13 — US dollar weakness into the November election on deficit concerns maybe?

Also, the market seems to think inflation is coming down and is turning risk-on with equities again, which is exerting pressure on USD — or maybe it’s actually the drop in inflation, yields and USD that is driving the risk-on flows? FOMC minutes are due later but otherwise a quiet day as far as economic data is concerned.

The US dollar index (DXY) is down 1% over the past 5 days. The DXY has shed 2.73% on a one-month basis as of August 21, although it is still up 0.21% year-to-date.


GBPUSD hit 1.30 for its best in more than a year as well.



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