European Stocks Waver, Euro Rebounds, Pound Faces More Headwinds

  • Sep 27, 2022
  • Bridgette Randall
  • European markets traded higher and the euro and the British pound inched up from near record lows. Natural gas prices rebounded as much as 12%.

    Benchmark indexes in Europe advanced after investors searched for beaten down stocks in financials and energy sectors. 

    The DAX index increased 0.6% to 12,299.50, the CAC-40 index added 0.7% to 5,810.25 and the FTSE 100 index inched higher 0.1% to 7,028.24. 

    European markets lacked direction as investors worried that rapid rise in interest rates may dip the economy into a recession without killing the high inflation. 

    Natural gas prices rebounded in Amsterdam trading and the TTF gas price futures for the immediate month delivery increased as much as 12% before cooling to 8.5% gain to 188.34 euros a megawatt hour. 

    Brent crude oil also rebounded 2.9% from a nine-month low to $86.56 a barrel. 

    The U.S. dollar paused its year-long advance and the euro traded at 96.25 cents and the British pound edged up to $1.77. 

    The British pound is expected to test its parity with the U.S. dollar and the euro in the coming weeks as the island nation struggles with rising cost of energy imports, falling government revenues and rising sovereign borrowing. 

    Currency traders are anticipating the pound to drop as low as 93 U.S. cents if the Bank of England fails to intervene and lift interest rates in an emergency meeting.