London: The euro and pound fell against the dollar Monday after rallying last week when central banks signaled tighter monetary policy in reaction to solid economic growth and high inflation.
As the year’s second half got under way, European stock markets rebounded from heavy falls ahead of the weekend
The dollar last week tumbled after the ECB, Bank of England and Bank of Canada indicated that the age of cheap cash—in place since the financial crisis—was drawing to a close as the world economy gets back on track. “I think the coordination of language reflects a coordination of the recognition that the global economy is pointing higher and the time for emergency policies in individual jurisdictions has ended,” Greg McKenna, chief market strategist at AxiTrader, said Monday. During the first half, the euro jumped about ten percent against the dollar, while the pound gained almost as much from its January lows, despite British political uncertainty caused by the country’s decision to leave the EU.
On equity markets Monday, London’s benchmark FTSE 100 index was up 0.4 percent around midday, compared with Friday’s close. In the euro zone, Frankfurt’s DAX 30 gained 0.7 percent and the Paris CAC 40 jumped 1.0 percent, as traders reacted to regional manufacturing PMIs.
The UK’s manufacturing reading came in at a three-year low of 54.3, noted Spreadex analyst Connor Campbell.
