A weak pound (GBPUSD=X) managed to help the FTSE 100 (^FTSE) outperform against its European peers on Thursday, with the currency hitting a 14-month low in early trading.
Sterling has lost a cent against the US greenback, extending its recent losses and falling below $1.23 to its lowest level since November 2023.
It comes as a rise in borrowing costs this week continued to spook the markets. The yield, or interest rate, on benchmark 10-year UK debt rose by 12 basis points in early trading in London to 4.921%, the highest since 2008.
Thirty-year bond yields, which hit 28-year highs this week, are rising again too, currently up over 10 basis points to 5.474%.
Kyle Rodda, senior financial market analyst at Capital.com, said: “There’s a mini-crisis brewing in UK markets amidst a broad-based sell-off in the country’s assets. For no explicable reason aside from already known factors like weak growth, elevated inflation, and unsustainable fiscal settings, stocks, bonds and the Pound plunged, in moves reminiscent of the 2022 Truss meltdown.
“The moves indicate a looming crisis of confidence in the UK and reflects expectations of ongoing and long-term economic malaise which will only be addressed by massive reform.”
Adding pressure to this, the US dollar has been strengthening in value, pushing US bond yields higher, and raising bond yields in anticipation of potentially inflationary policies from Donald Trump.
-
London’s benchmark index was 0.4% higher in early trade.
-
Germany’s DAX (^GDAXI) dipped 0.1% and the CAC (^FCHI) in Paris was treading water.
-
The pan-European STOXX 600 (^STOXX) was flat.
-
US markets will be closed on Thursday to observe a National Day of Mourning for former president Jimmy Carter.
-
The pound was a further 0.6% down against the US dollar (GBPUSD=X) at 1.2289.
Stocks: Create your watchlist and portfolio
FTSE Index – Delayed Quote • USD
8,293.76 – (+0.52%)
As of 9:24:21 GMT. Market open.
Follow along for live updates throughout the day:
LIVE 4 updates
-
Reeves says she has iron grip’ on nation’s finances
Last night, chancellor Rachel Reeves insisted she had an “iron grip” on the nation’s finances, with a Treasury spokesperson declaring:
-
Pound falls below $1.23 to 14-month low
The pound (GBPUSD=X) hit a 14-month low against the dollar in early trading in London today. Sterling lost a cent against the US greenback, extending its recent losses and falling below $1.23 to its lowest level since November 2023.
It comes as a rise in borrowing costs this week continued to spook the markets. The yield, or interest rate, on benchmark 10-year UK debt rose by 12 basis points in early trading in London to 4.921%, the highest since 2008.
Thirty-year bond yields, which hit 28-year highs this week, are rising again too, currently up over 10 basis points to 5.474%.
Kyle Rodda, senior financial market analyst at Capital.com, said:
Adding pressure to this, the US dollar has been strengthening in value, pushing US bond yields higher, and raising bond yields in anticipation of potentially inflationary policies from Donald Trump.
-
Asia and US overnight
Asian stocks were mostly lower overnight after UK and US stock indices ended on a mixed note.
The Nikkei (^N225) fell 0.9% on the day in Tokyo as Japan reported strong wage growth for November which might help persuade its central bank to raise interest rates.
The dollar also slipped against the Japanese yen. A dollar bought 157.78 yen, down from 158.36 late Wednesday.
The Hang Seng (^HSI) lost 0.2% in Hong Kong and the Shanghai Composite (000001.SS) was 0.6% down by the end of the session.
South Korea’s Kospi (^KS11) ended the session flat despite strong gains for technology companies and carmakers.
Across the pond on Wall Street the Dow Jones (^DJI) rose 0.3% to 42,635.20, the S&P 500 (^GSPC) rose 0.2% to 5,918.25 and the Nasdaq Composite (^IXIC) fell 0.1% to 19,478.88.
It came a day after strong reports on the economy stirred up worries that inflation and interest rates may remain higher than expected.
In the bond market, benchmark 10-year US Treasury notes yielded as much as 4.73%, a peak since April 2024, and were 4.7% last night. They were up from 4.69% late on Tuesday.
US markets will be closed today to observe a National Day of Mourning for former president Jimmy Carter.
Osaka – Delayed Quote • USD
39,605.09 – (-0.94%)
At close: 15:45:02 GMT+9
-
Coming up
Good morning, and welcome back to our markets live blog. As usual we will be taking a deep dive into what’s moving markets, and all that’s happening across the global economy.
Here’s a quick look at what’s on the agenda for today:
-
7am: Trading updates: Tesco, Hilton Foods, Marks and Spencer, Unite, Greggs, B&M
-
10am: Eurozone retail sales for November
-
12.30pm: Challenger survey of US job cuts in December
-
1.30pm: US Wholesales Inventories
-
4pm: Bank of England policymaker Sarah Breeden gives speech
-
Download the Yahoo Finance app, available for Apple and Android.