Afternoon Market Update – 15/12/2016 – by Jaz Singh

All eyes are on the dollar this morning as it climbed to its highest level since 2003. This comes as markets price in a steeper rate hiking path by the Fed, with the dollar index rising to the 103.00 level. The dollar has gained some 1 percent against the Euro and 1.2 percent against the yen. With the Fed signaling three further rate increases next year we see European bank stocks rallying to 12 month highs. The banking sector has led gains in European bourses this morning, with the DAX currently trading just off its intraday high and the Stoxx Europe 60 up 0.6 percent. The FTSE 100 is also positive for the day off the back of relative sterling weakness compared to the dollar; cable currently trades near the 1.2450 level, extending its losses from the FOMC’s rate decision. As expected, the Bank of England has maintained interest rates at 0.25 percent and the asset purchase programme at its current levels. In the commodity complex we see gold down over 1 percent today; the safe haven asset has dropped 14 percent since the start of October. This afternoon we have consumer price index figures from the US as the main data point on the calendar.