Pound slips on back of strong US jobs growth
Sterling resumed its downward slide after investors switched into dollars on the back of stronger than expected US job figures.
The pound slipped 0.3% against the dollar to $1.113 as US employers added 263,000 jobs in September and the country’s unemployment rate dropped to 3.5%, its lowest for 50 years.
The figures from the Bureau of Labour Statistics were higher than predictions by economists polled by Reuters who had expected 250,000 jobs to be added.
Both figures are likely will encourage the US Federal Reserve to keep raising interest rates at an aggressive pace.
Sterling has rallied from its record low of $1.03 following the mini-budget but could come under further pressure and persuade the Bank of England to also impose a sharp hike in interest rates.
Crude oil futures were again racing higher, consolidating the week’s firm rally on the back of the OPEC+ cuts in supplies. ICE Brent futures were trading at $96.96 per barrel.
Goldman Sachs hiked its Brent price forecast for this year and next, as the investment bank expects OPEC+’s output cut to be “very bullish” for prices. The US bank raised its 2022 forecast to $104 per barrel from $99 and the 2023 forecast to $110 from $108.
On Wall Street, stocks were firmly down with the Dow Jones Industrial Average was off 1.62% and the S&P 500 was down 2.16%. The tech-heavy Nasdaq Composite fell by 3%.
The FTSE 100 spent the day toying with on the edge of the 7,000 threshold, closing 6.18 points down at 6,991.09.
Among today’s risers was JD Wetherspoon which jumped 17% despite the huge increase in costs that forced it into a second year of losses.
Panmure Gordon issued research in which it said the City was valuing Abrdn’s core investment business at just £800 million. Its shares have plummeted in recent months and last month it dropped out of the FTSE 100.
David McCann, an analyst at Numis, predicted that a break-up of Abrdn could unlock almost £5.7 billion of value.