European stock markets were mostly quiet on Thursday as market participants waited cautiously for big announcements from central banks and new inflation data from the United States.
The FTSE 100 index dipped slightly, but the UK market managed a small gain. This rise in London comes as investors strongly expect the Bank of England to cut interest rates today, a belief that grew stronger after yesterday’s surprise drop in UK inflation.
In contrast, central banks in the rest of Europe, Norway, and Sweden are expected to keep their interest rates exactly where they are.
The market is paying close attention to the European Central Bank’s future plans, especially since some officials have suggested they might raise rates next year, which would be different from the US approach.
Energy stocks performed the best as oil prices rose, with BP gaining slightly after appointing a new CEO. However, healthcare companies struggled, with major firms like Novo Nordisk seeing their share prices fall.
On the FX front, the US dollar rose slightly on Thursday as investors prepared for important announcements from central banks in Britain, Europe, and Japan.
The dollar’s value increased by 0.2% overall, largely ignoring comments from President Trump that he wants the next leader of the Federal Reserve to lower interest rates significantly.
Meanwhile, other major currencies struggled against the dollar. The British pound fell because UK inflation dropped unexpectedly, which convinced many traders that the Bank of England will cut interest rates soon.
The Japanese yen also dipped slightly, although its losses were limited because investors expect Japan’s central bank to raise interest rates to a 30-year high on Friday. The Euro also declined by 0.2%.
Currency Power Balance
