UK stock markets are likely to open a tad higher on Monday, 25 January, tracking the largely upbeat Asian cues with Japan’s Nikkei 225 trading up. The futures linked to the benchmark FTSE 100 inched higher in the wee hours indicating a positive start to the London equities. The Great Britain pound (GBP) recouping the 1.37 level against the United States dollar (USD) is also expected to bolster the domestic investors’ sentiments.
Johnson- Biden chat
Prime Minister Boris Johnson’s call with the newly inducted US President Joe Biden is seen positive with the terms exchanged between the two leaders. Both are recommitted to the NATO alliance and discussed the benefits of a potential free trade arrangement between the two nations.
The Prime Minister also reiterated the country’s stance to resolve the ongoing trade differences between the two major economies. PM Johnson also welcomed Biden’s decisions re-join the World Health Organisation, the Paris Agreement on climate change, and the COVAX programme.
The leaders looked forward to working together through various intercontinental summits scheduled in the current year including COP26, G7 and G20, and for an in-person meeting as soon as the circumstances allow.
Both the leaders touched upon the unparalleled opportunities for building back better the societal and economic damage while discussing the significant challenges encountered due to the coronavirus pandemic.
Equities in London and New York
The FTSE 100 index settled 20.35 points, or 0.30 per cent lower at 6,695.07 on Friday last week, while FTSE 250, FTSE 350 and FTSE All-Share concluded with losses between 0.4 and 1 per cent. Wall Street ended on a dull note on Friday with Dow Industrials finishing slightly away from 31,000 at 30,996.98, down 179.03 points, or 0.57 per cent, S&P 500 dipped 0.30 per cent, while Nasdaq added 0.09 per cent.
GBP regains 1.37
The GBP to USD pair traded above 1.37 on Monday with gains of more than 0.20 per cent. Around 0622 GMT, the GBP vs USD currency pair was trading at 1.3716, up 0.23 per cent from the previous close of 1.3684. During the session so far, a unit of pound sterling shuttled between a low and high of 1.3675 USD and 1.3725 USD at the interbank foreign exchange market. The Bank of England had fixed a reference exchange rate of 1.3720 USD and 1.1299 EUR against a unit of GBP on 21 January.
GBP vs USD (25 January)
(Source: Refinitiv, Thomson Reuters)
Commodities market retreated marginally with the spot gold trading 0.23 per cent lower at $1,851.56 from the previous close of $1,855.86. The slowly emerging confidence amid the market participants with regards to the prospects of equities have seemingly affected the yellow metal in the recent past.
After soaring past the $1,900 and $1,950 levels, gold is back to sub-$1,900 mark. At the current prices, gold is trading 10.49 per cent lower from the 52-week high of $2073.41 per ounce in the first week of August 2020. Meanwhile, a barrel of Brent crude and WTI crude oil traded flat-to-slightly higher at $55.27 and $52.34, respectively.