As the Brexit-hit pound continues to get a hammering, the FTSE is still going strong despite an otherwise lackluster day in the stock markets. The GBP/USD broke below the 1.29 handle to reach its lowest level since last August, while the EUR/GBP hit a fresh high for the year at 0.90 and the GBP/JPY dropped below the May low of 143.20, as investors fretted over the prospects of a no-deal Brexit. The weakness of the pound may be the reason why the FTSE is trading higher.

After the sluggish wages data yesterday, the pound was hit again this morning on news UK inflation remained flat in June, raising further doubts over an August rate hike from the Bank of England. But this was good news for the stock markets, with the commodity-heavy FTSE 100 extending its gains after a sizeable rally the day before and despite ongoing weakness in prices of crude oil and metals.

The U.S.-led strikes against Syria turned out to be a non-event as far the markets are concerned and fortunately there were no reports of casualties. Only three targets were hit and the wave of strike action has already been declared to be over -– at least for the time being, anyway. However, investors still remain wary of the potential for tensions to escalate between Russia and the West.

The forex, equity and commodity markets have started the new week fairly quietly. In fact, this week looks set to be a quieter one for global macroeconomic data releases and other fundamental events.

Wednesday’s tech sell-off is doing little to weigh on risk appetite ahead of the open on Thursday.

It's budget day in the UK and normally that would mean the normal discussions around the UK’s finances and the government’s plans for the next 12 months, however this time we will have the added issue of Brexit.

It hasn’t been a good week for the pound so far. Ongoing uncertainty over Brexit negotiations and weak economic data have overshadowed the recent hawkish talk from the Bank of England.

As interest rate expectations rise, certain higher-yielding stock market sectors may lose their attractiveness on valuation concerns. So far, however, we haven’t seen a big enough drop to validate this view, but that could only be a matter of time.

Comments on the financial markets following the UK general election result.

The euro has been largely out of favor during the past five days and is set to end the week lower against most of her rivals. Thus, any strength in the pound is likely to be expressed in the euro/British pound currency pair in the short-term, as it was at the time of this writing.