Closing summary
With Boris Johnson’s future as prime minister in the balance, following a flurry of resignations including the chancellor and the health secretary, the pound – already battered by recession fears – has come under more selling pressure. It fell to a fresh low of $1.877 today, the lowest since the early days of the pandemic, and is currently down 0.4% on the day at $1.1911, still below the $1.20 mark.
Jordan Rochester, strategist at the Japanse investment bank Nomura, now expects sterling to slide in the coming months to its lowest level since 1985 against the dollar. He is targeting $1.15 by the end of July and $1.10 by the end of September, compared with a previous target of $1.18.
With the US becoming a key energy export partner for Europe, this is leading a significant ... trade shock to the benefit of the dollar.
You can follow the latest developments on our politics live blog here.
The latest Institute for Supply Management report on the US services sector showed it expanded for the 25th month in a row, albeit at a slightly slower pace. The headline index fell to 55.3 in June, from 55.9 in May. Wall Street stocks are broadly flat.
The euro is also being hammered by worries over recession and an energy supply crunch and is approaching parity versus the dollar, falling 0.9% to $1.0177.
European stock markets are rallying after yesterday’s slump. The FTSE 100 index is 103 points ahead, or 1.4%, at 7,124 while the German Dax has gained 1.8%, France’s CAC 1.9% and Italy’s FTSE MiB is up 1.2%.
Crude oil bounced back earlier in the day after yesterday’s near-10% plunge but has reversed those gains and is trading lower. Brent crude is at $102.07 a barrel, ,down 0.7%, while US light crude has lost 1.1% to $98.36 a barrel.
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Thank you for reading. We’ll be back tomorrow. Take care! - JK
Updated
Wall Street has opened broadly flat, as investors awaited minutes from the US Federal Reserve’s last meeting, released at 7pm BST. The Dow Jones fell 10 points at the open to 30,957 while the S&P 500 rose less than a point and the Nasdaq gained 15 points.
