FTSE 100 Set to Open Lower as Investors’ Focus Shifts to BoE Policy Outcome

March 17, 2021 06:36 PM AEDT | By Abhijeet

FTSE 100 Set to Open Lower as Investors’ Focus Shifts to BoE Policy Outcome

Markets eye central banks’ action

The BoE Governor Andrew Bailey-led MPC is slated to announce the interest rate decision on Thursday, 18 March. The BoE policy makers have abrogated the idea of negative interest rates in the last policy action in February, defying the extended murmur of the Threadneedle Street decreasing the key lending rates below zero for the first time to aid the economic recovery.

The Great Britain pound (GBP) traded little changed in the negative territory against the United States dollar (USD) as the greenback held firmness ahead of the US Federal Reserve decision on interest rates scheduled to be announced later today. The global market participants have been eyeing the cues from the US Fed and the post-decision commentary by the Federal Reserve Chairman Jerome Powell.

The market experts and economists will be keenly looking forward to any description from the policy action that can develop a possibility of interest rate hike by the US Fed in the upcoming policy decisions. Any indication supporting an earlier-than-expected raise in the interest rates by the Federal Open Market Committee (FOMC) is likely to bolster the prospects for the weakened US dollar.

According to the latest foreign exchange data, the GBP to USD pair was trading almost flat at 1.3891 (0618 GMT), down 0.03 per cent from the previous close of 1.3887. During the day, the currency pair has shuttled between a narrow range of 1.3879 and 1.3906 at the interbank foreign exchange market. The BoE had fixed a reference spot exchange rate of 1.3862 USD and 1.1633 EUR against a unit of pound sterling on 15 March.

Equities remain in red

The futures tied to the London Stock Exchange’s FTSE 100 traded 0.77 per cent lower on Wednesday, indicating a negative start to London equities. Earlier yesterday, the benchmark index managed to close with a gain of 0.80 per cent, after paring gains in the late afternoon deals.

Meanwhile, Asian equities continued to trade lower footstepping the Wall Street action. Japan’s Nikkei 225 shed 0.21 per cent to 29,857.75, China’s Shanghai Composite dropped 0.40 per cent to 3,433, Hong Kong’s Hang Seng slid 0.33 per cent to 28,932.08, South Korea’s Kospi plunged 1.10 per cent to 3,033.52, while India’s Nifty 50 slipped 0.27 per cent. Australia’s ASX 200 had closed 0.47 per cent lower at 6,795.20.

Earlier on Tuesday, the Dow Industrials fell 0.39 per cent to close at 32,825.95, S&P 500 terminated 0.16 per cent lower at 3,962.71, while the tech-heavy index Nasdaq Composite managed to conclude marginally higher at 13,471.57, up 0.09 per cent.

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.