Dollar eases from highs as yen hits 153

The US dollar edged down 0.1% early Friday after touching a two-month high, while the yen hovered near 153 to the dollar, its weakest level in eight months, following cautious remarks from Japan’s incoming leader Sanae Takaichi. Spot gold slipped 0.3% to $3,964.50 per ounce, extending its decline after breaching $4,000 earlier in the week, and Brent crude eased to $64.95 a barrel after Israel ratified a ceasefire with Hamas. In equities, US futures rose 0.1% after Thursday’s fall in the S&P 500, while Asian markets traded lower as Chinese stocks retreated on tighter rare-earth export controls.

Equities

London’s FTSE 100 fell 0.4% on Thursday, retreating from its recent record highs as a sharp drop in HSBC shares weighed heavily on the index. HSBC closed down 5.4%, its steepest one-day decline in more than six months, after announcing plans to buy the remaining minority interests in Hong Kong’s Hang Seng Bank for HK$106.1 billion ($13.6 billion).

The deal would consolidate HSBC’s control of the lender but raised investor concerns over capital use. Other banks also weakened, with Lloyds Banking Group falling 3.3% and Close Brothers tumbling 12.8% after both warned they may need to increase provisions linked to a motor finance investigation. Lloyds also said it will buy Schroders’ 49.9% stake in their UK wealth management joint venture.

Aston Martin dropped 12.6% in the FTSE 250 after Ferrari’s 15.4% fall in Milan the previous day unsettled the luxury car sector, following investor disappointment with Ferrari’s long-term financial targets. Homebuilders came under renewed pressure, with Taylor Wimpey and Barratt Redrow down 4.6% and 3.6% respectively, after data from the Royal Institution of Chartered Surveyors showed Britain’s housing market slowed for a third consecutive month.

Secure Trust Bank shares slid 20.2% after it said annual profits would fall short of market expectations. In contrast, Volution Group rose 5.2% to a record high after posting strong annual results, supporting the construction and materials sector, which edged up 0.9%. The FTSE 250 added 0.05%, supported by strength in mid-cap industrial names.

In the United States, markets pulled back late on Thursday as investors paused ahead of third-quarter earnings. The Dow Jones Industrial Average fell 0.52% to 46,358.42, the S&P 500 slipped 0.28% to 6,735.11, and the Nasdaq Composite dipped 0.08% to 23,024.63.

Delta Air Lines climbed 4.3% after issuing a strong profit forecast for the fourth quarter, lifting the S&P 1500 Airlines index by 1.9%. Costco gained 3.1% after posting firm September sales figures, while lithium producer Albemarle jumped 5.3% following a price target increase from TD Cowen and as China tightened export controls on rare earths. The materials sector was the weakest performer, while consumer staples were the only gainers.

Forex & Commodities

The US dollar strengthened on Thursday, lifted by a firmer stance from Federal Reserve policymakers and continued political uncertainty in Europe. The dollar index rose to 99.47, its highest level since 1 August. The yen weakened to 153.09 after briefly rising when Japan’s new ruling party leader, Sanae Takaichi, said she did not want to trigger an “excessive” fall in the currency. The euro slipped to $1.1545, its lowest since early August, as French political uncertainty deepened following the resignation of Prime Minister Sébastien Lecornu and his government. Traders are focused on the next Fed meeting later this month, with markets pricing in a high likelihood of a 25-basis-point rate cut.

Gold traded steadily early on Friday at $3,974 per ounce, having reached a record high of $4,059 earlier in the week. The metal has risen 2.2% so far this week, supported by ongoing expectations of further US rate cuts and strong safe-haven demand amid geopolitical tensions. Analysts said investors remain active in gold markets, with recent price swings prompting some profit-taking but overall sentiment staying positive. Silver also gained, standing at $49.89 per ounce after touching a record $51.22 on Thursday, while platinum and palladium eased slightly.

Oil prices declined on Friday, extending losses from the previous session as geopolitical risk premiums faded following confirmation of a ceasefire between Israel and Hamas. Brent crude was down at $64.98 a barrel early in the day, while US West Texas Intermediate traded at $61.31. The Gaza ceasefire agreement shifted investor focus back to supply conditions, with OPEC+’s decision to modestly increase production in November easing concerns about an oversupply. Despite the decline, both benchmarks remain marginally higher for the week after earlier gains linked to continued uncertainty around sanctions on Russian oil exports.