Spreadex Market Update

Sterling rises, Mnuchin denies downplaying of dollar



Sterling climbed on Tuesday night following on from Theresa May’s call for a snap election on 8th June. The GBP/USD currency pair spiked up to above the 1.29 level at one point before settling on a 1.285 level; just off a 6-month high.

It is thought that the election result will leave May’s party with a much more comfortable majority in the Commons, inevitably leading to a more unified stance on Brexit negotiations with the EU.

A stronger pound can be vulnerable to British stocks, especially to those in the FTSE 100. More than two thirds of its companies’ earnings are derived from overseas operations.

"Over in the states, Treasury Secretary Steven Mnuchin was quoted as saying that President Trump is "absolutely not" trying to talk down the strength of the dollar."

However, it appears that most of the damage was incurred yesterday afternoon with the FTSE 100 hanging on to a support level around the 7130 mark in this morning’s trading.

Over in the states, Treasury Secretary Steven Mnuchin was quoted as saying that President Trump is "absolutely not" trying to talk down the strength of the dollar. The quote was reported in this morning’s edition of the Financial Times and it builds on the FT’s story from late Monday.

Mnuchin played down remarks by Trump in a Wall Street Journal interview last week where the latter had said the dollar was "getting too strong". Asked if Trump's remarks were an attempt to talk down the dollar, the Treasury Secretary replied, "absolutely not, absolutely not".

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