European stocks give up early gains, euro dips on ECB rate pause expectations

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World stocks whipsaw on Friday after balanced message from Federal Reserve

fell by 1.2 per cent to €15.70. As central bankers in Europe pondered the likelihood of another rate hike, bank shares moved in different directions.Kerryboth tracked up by approximately 1 per cent while insulation maker Kingspan fell by the same margin.European shares also gave up earlier gains to slip 0.14 per cent, and the euro fell to its lowest since mid-June on expectations that the European Central Bank could pause its tightening cycle next month.

Markets are split almost evenly on whether the ECB will hike at its meeting next month, compared with around a 60% chance of a September hike before weak activity data was published earlier this week.Sterling has been on a downward path over the past week amid fresh speculation from analysts that the Bank of England will pause recent interest rate rises after its September meeting.

The FTSE 100 moved 0.07 per cent, or 4.95 points, higher to finish at 7,338.58 as London’s multinational firms were boosted by the currency movement.was another significant faller after it warned over profits due to “subdued market conditions”. The Fed may need to raise interest rates further to ensure inflation is contained, Powell said at the Jackson Hole conference, which was also attended by other top global central bankers.

 

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