Euro/Dollar Slips as French and German Economies Contract
The FTSE is not feeling the Valentine’s Day spirit this morning and has moved lower by ten points to 6350.
In today’s shares spread betting, iron ore mining is in focus, as Rio Tinto reported a full-year loss of around $3 billion.
Whilst the size of the loss is enough to cause a quick intake of breath, the write-downs that partly account for it have been out in the open since January’s management changes.
In fact, earnings beat analysts’ expectations, and we initially saw the Rio Tinto share price moving up, but now it is lower by 1%.
The Australian miner had traded up 2% into the results, so it’s understandable to see this profit-taking.
Nevertheless, a bit more cash in the pocket for shareholders through an increased dividend has helped to appease somewhat.
Data showing retractions in France and Germany for the fourth quarter of last year has pushed the euro/dollar spread betting market below $1.34.
The fall from January’s strong rally and the $1.36 level had halted in the last few days, but renewed selling pressure is starting to come in.
Figures of -0.4% for France and -0.6% for Germany are both worse than expected, and there is a particular worry over the export numbers in the German GDP reading.
This highlights the still shaky Eurozone situation that equities have often overlooked so far in 2013.
US markets were relatively flat yesterday, with some underperformance from the Dow and 14,000 still the focus.
Today we expect the market to open a touch lower at 13,970.
Spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.
Financial Market Comments from Will Hedden, Sales Trader, IG Index.
The above comments do not constitute investment advice and Clean Financial accepts no responsibility for any use that may be made of them.
Content provided by IG Index which is Authorised and regulated by the Financial Services Authority. FSA Register number 114059.