28th Jan 2026 06:58
(Alliance News) - Stocks in London are set to open higher on Wednesday, as a weaker US dollar and record gold prices dominate ahead of Federal Reserve rate decisions and Big Tech earnings.
IG says futures indicate the FTSE 100 to open 12.6 points higher, 0.1% at 10,220.40 on Wednesday. The index of London large-caps closed 0.6% higher at 10,207.80 on Tuesday.
"The buck continued to take a battering yesterday, as metals gained ground once more, and stocks printed new record highs. Today, the first FOMC decision of the year, as well as a handful of megacap earnings, highlight the calendar," said Michael Brown Senior Research Strategist at Pepperstone.
Sterling was quoted at USD1.3806 early Wednesday, higher than USD1.3765 at the London equities close on Tuesday. The euro traded at USD1.1996 early Wednesday, higher than USD1.1969 late Tuesday. Against the yen, the dollar was quoted at JPY152.68, lower versus JPY153.05.
Drivers of the US dollar's weakness include heightened policy volatility emanating from Washington on the trade front, alongside speculation that the Trump administration may be comfortable with a weaker greenback, fuelled by last week's New York Fed rate checks in USD/JPY and reinforced by comments from President Donald Trump himself on Tuesday.
Gold surged to another record high and the sell-off in the US dollar accelerated after Trump said he was unconcerned by the currency's sharp declines in recent days.
Trump said the dollar was "doing great".
He added: "Look at the value of the dollar. Look at the business we are doing. The dollar is, the dollar is doing great."
Gold was quoted at USD5,261.40 an ounce early Wednesday, higher than USD5,093.94 on Tuesday.
A UK government-backed investment fund said it will plough GBP100 billion into the UK economy over the next five years.
The National Wealth Fund said it would create and support some 200,000 jobs and save 500 million tonnes of carbon emissions by 2050 under its five-year strategy.
The Treasury-owned investment body said its focus would be on growth opportunities aligned with the government's green energy agenda, prioritising sectors such as nuclear energy, hydrogen and steel, alongside high-growth industries including artificial intelligence, semiconductors and life sciences.
In the US on Tuesday, Wall Street ended mixed, with the Dow Jones Industrial Average down 0.8%, the S&P 500 up 0.4% and the Nasdaq Composite up 0.9%.
Markets are bracing for what is expected to be the dominant theme of the week, with Big Tech earnings from four of the so-called Magnificent Seven. Microsoft, Meta Platforms and Tesla report on Wednesday, followed by Apple on Thursday.
In Asia on Wednesday, the Nikkei 225 index in Tokyo was down 0.1%. In China, the Shanghai Composite was up 0.6%, while the Hang Seng index in Hong Kong was up 2.5%.
The S&P/ASX 200 in Sydney closed down 0.1%.
Australian consumer prices jumped back up at the end of the year, official data showed, sharpening the debate over whether the Reserve Bank of Australia will need to lift interest rates.
According to the Australian Bureau of Statistics, the consumer price index accelerated to 3.8% year-on-year in December from 3.4% growth in November, beating the FXStreet-cited consensus of 3.6%.
The largest contributors included housing, up 5.5%. CPI inflation excluding volatile items and holiday travel picked up to 3.3% year-on-year in December from 3.2% in November.
German Economy Minister Katherina Reiche is expected to cut the government's growth forecast for 2026 on Wednesday as she presents the country's annual economic report.
Germany's Economy Minister Katherina Reiche is expected to cut the government's growth forecast for 2026 on Wednesday as she presents the country's annual economic report.
Weak exports could see the gross domestic product forecast trimmed from the 1.3% growth projected in the autumn, analysts warned. The report is due at 1330 GMT. Germany posted marginal growth of 0.2% last year after two consecutive years of recession.
LVMH on Tuesday reported weaker annual results, describing performance as "solid" in a "disrupted global economic and geopolitical environment". The Paris-based luxury group said net profit fell 13% to EUR10.88 billion in 2025 from EUR12.55 billion in 2024, while revenue declined 4.6% to EUR80.81 billion from EUR84.68 billion.
Brent oil was trading at USD66.93 a barrel early Wednesday, higher than USD65.92 late Tuesday.
In Wednesday's corporate calendar, Fresnillo releases a trading statement, Hargreaves Services posts half-year results, while PayPoint and Pets At Home Group also issue trading statements.
In the economic calendar on Wednesday, Ireland retail sales and interest rate decisions from Canada and the US.
By Eva Castanedo, Alliance News reporter
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