LONDON MARKETS: FTSE 100 Drops As U.S. Dollar's Slide Boosts Pound
18 Luglio 2017 - 10:34AM
Dow Jones News
By Carla Mozee, MarketWatch
Update on U.K. inflation ahead
U.K. stocks fell Tuesday, as renewed doubts over President
Donald Trump's ability to push through his agenda prompted a slide
in the dollar and a corresponding jump in the British pound.
The FTSE 100 index declined 0.5% to 7,369.83, hurt by losses
across all sectors.
The moves came as the pound hit an intraday high of $1.3107,
driven by a broad fall in the U.S. dollar to levels not seen since
August 2016. A stronger pound can weigh on the FTSE 100, as it
affects the many large multinational companies on the London index
that generate revenue and earnings in overseas markets.
The greenback was under pressure after Republican leaders in the
U.S. Senate late Monday ditched their bill to repeal and
simultaneously replace
(http://www.marketwatch.com/story/health-care-overhaul-seems-sunk-as-two-more-republicans-oppose-senate-bill-2017-07-17)
much of the Affordable Care Act, or "Obamacare," after it became
clear it wouldn't have enough votes to pass.
First Take:Could GOP health-care bill's implosion actually lead
to a bipartisan solution?
(http://www.marketwatch.com/story/could-gop-health-care-bills-implosion-lead-to-bipartisan-solution-2017-07-17)
"This implies that [U.S. President Donald] Trump's tax reform
agenda may be now more difficult to implement and may take longer
to arrive, as the cuts in health care were expected to finance some
of the promised fiscal measures," said Charalambos Pissouros,
senior analyst at IronFX, in a note.
U.K. equities were driven higher after Trump's election in
November, on the prospect that lower corporate taxes, higher fiscal
spending and a pickup in inflation in the U.S. would benefit banks,
construction companies and others.
Metals in focus: But the decline in the dollar failed to bolster
prices for metals, which are denominated in the U.S. currency. In
turn, shares of mining companies lost ground. Iron ore producer BHP
Billiton PLC (BLT.LN) (BHP.AU) (BHP.AU) fell 1.6%, and diversified
miner Anglo American PLC (AAL.LN) lost 1.7%.
Rio Tinto PLC (RIO) (RIO) (RIO) shares were down 1.7%. On
Tuesday, the mining company lowered its export guidance for iron
ore
(http://www.marketwatch.com/story/rio-tinto-reduces-iron-ore-export-forecast-2017-07-17)
on weather and maintenance disruption.
But precious metals miners Fresnillo PLC (FRES.LN) and Randgold
Resources PLC (RRS.LN) picked up 0.1% each.
Inflation data ahead: The pound, which has recently been trading
at around 10-month highs, will remain in focus with the release of
June consumer-price inflation data at 9:30 a.m. London time, or
4:30 a.m. Eastern Time, from the U.K.'s Office for National
Statistics.
The rate may hold steady at 2.9%, already at its highest in four
years and well-above the Bank of England's inflation target of 2%.
A further increase in the inflation rate may continue to fuel talk
about if policy makers may decide to raise the benchmark interest
rate from a record low of 0.25%.
(END) Dow Jones Newswires
July 18, 2017 04:19 ET (08:19 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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