Sterling only major FX mover as traders fear Johnson government less certain

Markets subdued as US-China talks drift

Markets remained flat in the US and Europe as US-China trade talks continued to drift and the UK continued on its lacklustre General Election campaign trail.

Only sterling showed any significant movement – and that was downwards against the dollar and euro, driven lower by fears that the General Election might not be a simple shoo-in for the current Prime Minister Boris Johnson.

Meanwhile, UK Finance revealed that mortgage approvals fell to a seven-month low in October as political uncertainty affected confidence in the housing market. Gross residential mortgage lending totalled £25.5bn in October, an annual fall of 0.9 per cent.

On the stock markets, the UK was virtually unchanged. The FTSE 100 rose by 0.19 per cent to close at 7,410.31 while the FTSE 250 mid cap index rose 0.67 per cent to finish the day at 20,842.32.

The pound, dented by a lack of confidence around the result of the UK General Election on December 12, fell by 0.43 per cent against the dollar to end the day at $1.2844 in London, having gained 0.5 per cent on Monday November 25.

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Sterling was also weaker against the euro, drifting 0.41 per cent lower to 85.57 pence per euro or 1.166394. Analysts said that the pound had been strengthening on the expectation that the Conservatives would easily win next month’s General Election. A number of polls showing the Tories’ lead over Labour was not as large as had first appeared helped dampen the currency’s value through the day.

Wall Street's main stock indices opened flat after mixed results from retailers and no specific progress in the trade talks between the US and China, which are now expected to drift into the new year without a resolution to phase one of the negotiations. By midday all indices had posted small gains.

The Dow Jones rose just 28 points, or 0.1 per cent, in intraday trading to 28,097, while the S&P 500 opened higher and by midday had gained 5.2 points, or 0.17 per cent, at 3,138. The Nasdaq gained 19 points, or 0.22 per cent, to 8,652 in intraday trading.

In the commodity market, crude oil was up slightly at 58.10, a rise of 0.16 per cent. Bitcoin GBP rose 1.25 per cent to 5,612.

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