British Pound Slides 0.9% Amid U.K. Fiscal Concerns, European Markets Weaken
The British Pound fell sharply on Tuesday, sliding 0.9% against the U.S. dollar as investors grew increasingly concerned over the United Kingdom’s public finances. Sterling traded at 1.3388 USD by 9:38 a.m. London time, reflecting mounting market worries about the country’s fiscal stability. Analysts note that the pound’s decline mirrors broader investor caution as global economic uncertainties linger.
European stock markets also faced pressure, with major indices opening lower. The U.K.’s FTSE 100 slipped 0.4%, Germany’s DAX dropped 0.88%, and Italy’s FTSE MIB declined 0.46%, while France’s CAC 40 remained flat. Overall, the Stoxx Europe 600 index fell 0.6% amid concerns over tariffs and international trade tensions that continue to impact investor sentiment across the region.
Corporate developments provided some divergence in market performance. Private markets investor Partners Group surged to the top of the Stoxx 600 after reporting first-half profits of 578 million Swiss francs ($720 million), exceeding analysts’ expectations due to higher performance fees. In contrast, Fresenius Medical Care shares tumbled 5.5% following a UBS downgrade to “Sell.” Meanwhile, Italy’s Monte dei Paschi sweetened its takeover bid for Mediobanca, offering a cash component alongside stock, signaling ongoing consolidation in the Italian banking sector.
Global market sentiment has also been influenced by trade policy developments. Investors are weighing the impact of a U.S. federal appeals court ruling that invalidated most of President Donald Trump’s global tariffs, ruling that Congress alone holds the authority to impose sweeping levies. Trump has criticized the decision as “highly partisan” and plans to appeal to the Supreme Court. These developments add to the cautious mood as September, historically the worst month for U.S. equities, begins.
Regional investors are now turning their attention to upcoming economic indicators. Eurozone inflation data, set for release at 10 a.m. London time, and Spain’s unemployment figures are expected to influence trading sentiment. Analysts warn that currency and equity markets could remain volatile as investors monitor both fiscal policy in the U.K. and broader global economic trends in the coming weeks.
Source: cnbc