UK stock markets are likely to open a tad higher on Thursday, 21 January, tracking the upbeat Asian equities and Wall Street finishing on a positive footing after Joe Biden was sworn in as the new US President. Further, the Great Britain pound (GBP) advancing against the United States dollar (USD) in the early trade is likely to bolster the prospects of London equities.
The benchmark FTSE 100 index finished at 6,740.39, up 27.44 points, or 0.41 per cent, on Wednesday following a higher opening on the Wall Street. The wider share indicators FTSE 350 and FTSE All-Share gained up to 0.60 per cent, while FTSE 250 rallied 1.35 per cent.
Biden undoes Trump’s policies
The inaugural ceremony of the President-elect Biden and Vice President-elect Kamala Harris took place under tight security arrangements from the Federal Bureau of Investigation (FBI) following the recent drama at the Capitol Hill by the Trump supporters. Donald J Trump, who has not yet officially conceded defeat in the US presidential elections, left the White House premises just hours before the swearing in ceremony.
The ceremonial affairs were attended by the former Presidents Barack Obama, Bill Clinton and George W Bush. President Biden has served as the Vice President under the Obama administration. Vice President Mike Pence, under Trump’s administration, also shadowed the inauguration.
On the very first day in office, the newly-elected President Joe Biden began the action by undoing a bunch of policies set out by the erstwhile Trump administration.
In a total, Biden signed 15 executive orders including eliminating the travel ban on Muslim majority countries, the inclusion of non-US citizens for the census, ceasing the construction of border wall on the US-Mexico border, etc. A couple of orders reversed the stance of the Trump administration for cutting ties with the World Health Organisation (WHO) and climate change.
GBP extends jubilation
The GBP vs USD pair traded higher after surpassing the crucial level of 1.37 at the interbank foreign exchange market. The currency pair was trading at 1.3702, up 0.36 per cent from the previous close of 1.3653, at around 07:15 GMT. During the session so far, a unit of GBP has oscillated between a low and high of 1.3652 USD and 1.3710 USD, respectively. The Bank of England had fixed a reference exchange rate of 1.3618 USD and 1.1228 EUR vs a unit of pound sterling on 19 January.
GBP vs USD (21 Jan)
(Source: Refinitiv, Thomson Reuters)
Following the extended weakness in the greenback and a feeble outlook, a unit of pound sterling has gained nearly 90 basis points or a little more than 7 per cent in the last four months. According to the historical currency conversion data available with the Bank of England, a unit of GBP equalled 1.2721 on 22 September 2020.
Commodities in red
Gold traded flat on Thursday fluctuating in a narrow range from the last close as investors arrived to book partial profits. An ounce of yellow metal was trading at $1,869.90, down 0.15 per cent from the previous close of $1,871.93. Energy market also retreated on 21 January with a barrel Brent crude and WTI crude losing 0.30 to 0.40 per cent.
