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FTSE boosted by Fed testimony

The FTSE has some new-found optimism this morning after yesterday’s Fed Chair Jay Powell’s testimony to Congress. His cautious comments about the effects of trade tensions and the strength of the global economy on economic growth in the US were interpreted almost as a full blown assurance that a rate cut would happen at the end of July. 

While stocks seem to be having a field day the currency markets are a bit more cautious given that Powell will continue his testimony later today. His comments caused the dollar to yo-yo throughout the previous session ending with a plunge and this morning the greenback continued downhill against most majors. This is good news for the pound which otherwise had little by way of domestic news to lift it off its current lows. 

In London home builders and property companies are gaining after yesterday’s better-than-expected UK GDP data. Though the economy grew by the smallest of margins, the fact that it grew rather than shrank after Brexit didn’t happen and Theresa May resigned, gave rise to hopes that the housing market would also perform better over the coming months. 

Gulf of Mexico producers are bracing for the potential hurricane named Barry and have evacuated a number of oil rigs ahead of expected landfall this weekend. Brent is at $67.60 and rising as the supply situation in the Persian Gulf is also becoming more uncertain after an Iranian Revolutionary Guard gunboat approached a British tanker. 

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