DailyFX European Market Wrap: Concerns Over Trump Policy Hit Equities
Concerns over US President Donald Trump’s ability to get the rest of his promised policies through US politicians is dampening the sentiment across the European bourses this Monday.
The so called ‘trump trade’ has been flipped on its head after the failure of Trump to repeal "Obamacare" health reforms. Donald Trump failed to push his new reformed healthcare bill through in a congress dominated by his own Republican party and this is the reason for a plummet in global markets as well as the US dollar downfall.
However, Sterling reached an eight-week high, trading at $1.2577 on Monday morning, its highest level against the dollar since the beginning of February. The Bank of England released details of its new stress tests today. The weakness of the pound will now feature in further tests and evaluate how the banks would handle a further drop of 32%.
The UK’s largest banks will also face a consumer credit review. The new “exploratory” test, which will occur every other year, will assess banks’ resilience to a wider range of risks such as persistently low interest rates and high costs.
--- Written by Katie Pilbeam, DailyFX