Following a disappointing result from the Euro-group’s meeting yesterday, with no decision reached between Greece and its creditors, trading conditions were fairly volatile in today’s session. European equity markets extended declines as the CAC, DAX and IBEX retreated between 0.2% and 0.5%, while the Athens Stock Exchange declined over 2.4% as investors remain cautious amid persistent concerns regarding the Greek debt crisis.
The euro fluctuated strong trading both sides of 1.14 as it tested a day’s high at 1.1449 and a low at 1.1322 against the US dollar. Precious metal prices remained under heavy pressure following rumours of a possible interest rate hike, while market participants are likely to lock in any recent gains ahead of Chinese Lunar New Year holiday. Gold retreated as much as $10/ounce towards $1200/ounce, while silver plunged over 5% to reach a one-month low of $16.27/ounce.
On the macroeconomic front, UK inflation fell to record low in January. According to the Office for National Statistics (ONS), a decline to 0.3% in January from 0.5% in December was reported, partially due to a decrease in prices for fuel, food and alcohol. The London equity benchmark index bucked the downtrend in Europe and posted fresh gains in today’s session following the optimistic economic data.