LONDON MARKETS: FTSE 100 Set To Break 2-day Losing Run As Pound Slides, Miners Rise
By Sara Sjolin, MarketWatch
SSE falls after profit warning
U.K. stocks were rising for the first time this week on Wednesday, getting a boost from a weaker pound and a rally for miners.
The FTSE 100 climbed 0.4% to 7,310.82, set to break a two-day losing run.
The gain "can be derived from a hawkish Fed Chair Yellen (and colleague Bostic) supporting continued gradual rate hikes (market implied probability of Dec rate hike now 70%)," said analysts at Accendo Markets in a note.
"This has firmed the USD to the detriment of GBP and EUR, but to the benefit of the both benchmarks' internationals/exporters," they added.
Sterling fell to $1.3383 from $1.3460 on Tuesday, and fell further below the $1.36 level the currency hit earlier in September. The rally earlier in the month -- when the pound rose to the highest level against the dollar since the Brexit vote in June last year -- came after hints from the Bank of England it was preparing to raise interest rates in coming months.
However, over the last week the U.S. Federal Reserve has signaled it will lift rates again in December, sending the dollar higher. On Tuesday after European markets closed, Fed Chairwoman Janet Yellen reaffirmed expectations for a rate hike later in 2017 (http://www.marketwatch.com/story/yellen-says-fed-should-be-wary-of-raising-rates-too-gradually-2017-09-26), saying it would be "imprudent" to leave monetary policy on hold until inflation hits the central bank's target.