Dollar Slips as Fed Cut Bets Lift Gold, Sterling

The dollar edged lower near 98.93 as traders increased bets on a Federal Reserve rate cut next week, while sterling moved higher to $1.335 and gold rose early on Friday to $4227 per ounce. Oil prices steadied, with Brent at $63.23 and WTI at $59.57, as tensions between the US and Venezuela and stalled talks in Moscow offset signs of oversupply. Equity markets were supported late on Thursday by gains in Rolls-Royce, BAE Systems, Burberry, Salesforce and Meta, while Amazon and Kroger fell on updated corporate announcements.

Equities

The FTSE 100 closed 0.2% higher on Thursday, supported by gains in industrials and financials. Rolls-Royce rose about 2.6% during the session as defence shares moved higher after Russia-Ukraine peace talks stalled. BAE Systems also gained roughly 2.6%, adding to a three-day run for the wider aerospace and defence group.

Consumer names were mixed. Burberry climbed 3% early in the session after HSBC raised its price target, helping lift the personal goods sector. Diageo fell 3.9% after UBS downgraded the stock and cut its target price, weighing on beverages. Pharma stocks slipped, with AstraZeneca down 1.3% on Thursday.

Across the mid-cap FTSE 250, SSP Group jumped 11.3% after stating that annual profit should come in at the top end of guidance, driven by stronger trading at airport outlets. AJ Bell fell 7.6% after cautioning that added costs and recent budget changes would increase the complexity of ISAs. Frasers slipped 2.7% after reporting a 2.8% fall in first-half profit.

In the United States, major indices were little changed on Thursday. The Dow Jones Industrial Average closed 0.07% lower, the S&P 500 rose 0.11% and the Nasdaq added 0.22%.

Among the largest US companies, Amazon fell 1.4% late in the session after confirming discussions with the US Postal Service about the future of a key delivery contract that expires next year. Salesforce climbed 3.7% after raising its fiscal 2026 revenue and adjusted profit outlook, pointing to stronger demand for its AI agent platform. Meta Platforms rose 3.4% after a report suggested the company plans to cut its Metaverse budget by up to 30%.

Kroger fell 4.6% on Thursday after narrowing its annual sales forecast and missing quarterly revenue expectations. Dollar General jumped 14% after upgrading its full-year profit forecast. Snowflake dropped 11.4% after issuing a fourth-quarter product revenue outlook that fell short of investor hopes. Hormel Foods rose 3.8% after forecasting annual profit above estimates.

Forex & Commodities

The US dollar edged lower, with the dollar index slipping to 98.93 and staying close to a five-week low as traders looked ahead to next week’s Federal Reserve meeting. The dollar also moved lower against the yen, trading at 154.5, its weakest level since mid-November, following reports that the Bank of Japan may raise rates on 19 December. Sterling moved higher to $1.335, near Thursday’s six-week peak, while the euro traded slightly higher at $1.166. The Australian dollar rose to $0.6626 after touching a two-month high. The Swiss franc strengthened to 0.8026 per dollar.

Gold strengthened early on Friday, with spot prices rising to $4227 per ounce. Silver moved higher to $58.27 after hitting a record $58.98 on Wednesday, supported by concerns about supply and its inclusion on the US critical minerals list. Platinum rose to $1664 per ounce and palladium traded higher at $1465 per ounce.

Oil prices eased slightly on Friday morning, though both main benchmarks remained supported on the week. Brent traded at $63.23 per barrel, while WTI stood at $59.57, having risen over the week as tensions between the US and Venezuela increased and peace discussions in Moscow stalled. Both benchmarks had closed up around 1% in the previous session.