Spreadex Market Update
Property sector woes push pound to fresh 31 year low against dollar
Aviva’s decision comes after a similar move by Standard Life on Monday, both companies having seen a huge swell in investors trying to redeem their investments as the post-Brexit property fears intensified. This news, mere hours after the Bank of England had warned about the problems facing the property sector in its bleak financial stability report, exacerbated the pound’s already chunky losses, sending cable below $1.31 for the first time in 31 years. And while the FTSE benefited from sterling’s slide, the UK index climbing around 10 points as its multinationals cheered the prospect of cheaper exports, the situation in its beleaguered property and banking sectors remained dire.
With the pound hitting a 2 and a half year low against the euro the Eurozone indices took a battering this Tuesday, falling for the exact opposite reason the FTSE rose. The euro’s surge took both the DAX and CAC 2% lower, their worst performance since the initial few days following the referendum results.
Like the Eurozone the Dow Jones wasn’t all too happy about the strength of its currency, the growing greenback helping take the US index nearly 150 points lower after the bell. It didn’t help that the latest factory orders reading was worse than expected, coming in at -1.0% against the -0.8% forecast and the robust 1.9% seen last month.
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