- Sterling declines after inflation misses the mark
- Stocks fall as investor sentiment dwindles
- Oil falls below $63 per barrel
Inflation stayed at 3% after the Bank of England increased interest rates at the beginning of the month. With little sign of domestic stimulation of asset prices, the central bank will likely give a dovish rhetoric at the next meeting.
The pound fell by 0.04% against the dollar and 0.76% against the euro. The consumer price index showed a 3% rise in the cost of goods and services, while core inflation, which omits the fluctuations of energies and food, showed a 2.8% increase.
The weaker sterling elevated the FTSE 100, which is heavily correlated with the valuation of the British pound.
Meanwhile, the euro is 0.65% stronger against the dollar as investors grow increasingly worried about the developments on US tax reform.
European stocks are stuck in a sea of red as optimism fades in the broader equity market. Germany’s DAX 30 is 0.4 lower, while France’s CAC 40 is 0.65% weaker.
The dollar is 0.41% lower against a basket of currency pairs, as the prospects of US tax reform weigh heavily on US sentiment.
US equities are trading downwards as part of a broader risk-off mood. Wall Street’s S&P 500 is 0.11% weaker, while the tech-heavy Nasdaq 100 is 0.04% lower.
Traders are paying close attention to the development of the Venezuelan’s money woes, where the nation has missed two interest rate payments on its $60 billion mountain of debt.
The US benchmark, crude oil, has given up 0.44% of its gains and the international benchmark, Brent oil, has shed 0.52% of its value.
Despite the weaker dollar and more cautious approach to trade, gold has declined by 0.27%