The pound was the surprise winner among currencies in a market still working out the ramifications of the USA’s military intervention in Venezuela.
The usual pattern when conflicts begin is that investors avoid risky assets like stocks and sterling and put their money in the US dollar, gold and suchlike – a move known as ‘risk off’. However, this time around, led by US oil shares, the Dow Jones hit a record intraday high, while rising defence stocks helped the FTSE 100 to a new record too.
Being a service-backed currency, sterling tends to follow stock markets and it powered to its best against the euro and the US dollar since September.
There wasn’t a great deal of other data for the markets to consider yesterday, except for ISM Manufacturing PMI in the US, which like Europe’s last week was a downgrade from last month and below estimates at the negative 47.9.
Today is a busy one for data and we have already had UK Shop Price Inflation coming in overnight at 0.7% for last month. This was an acceleration, but only a small one and led by food and alcohol.
French inflation has just been recorded at just 0.8% in the past year and Germany’s inflation will be out shortly. Then we have more pertinent PMI data for the UK – services.
Elsewhere in the business news, Nvidia announced that their AI tech could now make self-driving cars that think and reason like humans, opening the way for autonomous vehicles “to think through rare scenarios, drive safely in complex environments, and explain their driving decisions,” said Nvidia boss Jensen Huang.
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