Michael Hewson, chief market analyst at CMC Markets UK, said “While no one seriously expects the Federal Reserve to act on rates next month, some Fed officials seem extremely keen to try and keep the option on the table, with both the NY and California Fed President’s Dudley and Williams the most vocal, along with Fischer’s comments at the weekend”.
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On the currency markets, the pound was up 0.16% against the dollar at 1.308 U.S. dollars, while sterling climbed 0.4% against the euro at 1.158 euros.
The price of oil took another tumble as analysts were gloomy over the prospect of a talk between producers leading to a drop in supply.
They fell heavily following the UK’s vote to leave the European Union in June.
The UK’s leading share index began the week on the back foot as the prospect of a USA rate rise weighed on the market.
Brent crude prices also took a hit after fresh data showed a spike in Chinese diesel and gas exports, up 181.8 per cent and 145.2 per cent respectively in the month of July.
The FTSE 100 Index rose 0.1 percent at 8:27 a.m.in London.
The FTSE 100 Index fell 34.8 points to 6824.1, after the dollar rose against a basket of major currencies following weekend comments from US Federal Reserve Vice Chairman Stanley Fischer that the US was close to its inflation and jobs targets prompting speculation that the central bank could raise interests later this year. Housebuilders, which were sold off in the immediate aftermath of the Brexit vote, have gained ground in today’s session.
Taylor Wimpey was the biggest riser up almost four per cent or 5.4p to 158.7p, while Barratt Developments rose 12.8p at 463.5p.
Royal Dutch Shell (LON:RDSA) and BP (LON:BP) are also proving a drag on the index, tracking crude prices lower.
Shares in Anglo American, Fresnillo, Randgold Resources, Antofagasta and Glencore declined between 2.5 percent and 5.9 percent.
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In afternoon trading the biggest risers on the FTSE 100 Index were Taylor Wimpey (+4.8p to 158.1p), Persimmon (+37p to 1785p), Barratt Developments (+9.3p to 460p), Berkeley Group Holdings (+50p to 2537p) and Provident Financial (+47p to 2909p).
