Sterling slips against euro after European Central Bank tapering signal

Sterling slips against euro after European Central Bank tapering signal

Kashkari's motivation was to allow United States inflation rates and wage growth to push higher, but the sentiment concerned traders who are looking forward to three or possibly four interest rate hikes in 2018.

US West Texas Intermediate (WTI) crude futures changed hands at Dollars 63.55, down 0.4 percent on the day.

Investors would probably take a policy message change as a sign that rate-setters may begin to wind down their 2.55-trillion-euro bond-buying program.

Safe-haven assets such as gold and the yen firmed up ahead of earnings from the big USA banks and consumer inflation data due later in the day, while oil prices eased a little bit after hitting their highest levels since December 2014 in the previous session.

In the account of its December meeting, the Governing Council said there was a "widely shared" view among officials that communication would need to evolve gradually based on the outlook for growth and inflation.

The news gave the euro a further boost and pushed the single currency to a three year high against the dollar - up 0.8% to $1.2127. Yet it still suggested consumer spending had made a sizeable contribution to economic growth for the fourth quarter as a whole, after a disappointing third quarter.

The yield on Germany's 10-year government bond rose as high as 0.54 percent in early trade, the highest since August.

The U.K.'s FTSE 100 index logged a record close by rising 0.2% to 7,762.94.

Germany's 10-year bond yield hit a fresh five-month high of 0.539 per cent after Chancellor Angela Merkel's conservatives and the Social Democrats agreed a blueprint for formal coalition negotiations, news that also buoyed the euro.

MARKET CALM: Global equity markets settled after some turmoil earlier in the week sparked by a news report that China might slow or halt purchases of U.S. Treasurys, which Beijing later challenged.

The yield on the benchmark 10-year Treasury note fell to 2.531 percent at 2:33 p.m. ET, while the yield on the 30-year Treasury bond fell to 2.862 percent. The move could help the Italian-U.S. auto maker lower risks related to potential changes to the North American Free Trade Agreement.

Dow Jones closed up by 0.80 percent, S&P 500 ended up 0.70 percent, Nasdaq finished the day up by 0.79 percent.

Among other precious metals, silver rose by 0.24 percent to record $16.98 an ounce after hitting a two-week low of $16.86 on Wednesday. Sterling GBP= was last trading at $1.3731, up 0.03 percent.

Amundi's Defend said the gradual removal of liquidity from central banks would drive volatility higher across asset classes this year.

Brent crude prices hit $70 a barrel on signs of tightening crude stocks but settled off that level on Thursday, while a jump in energy shares helped lift USA stocks.

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