Global dollar stabilizes and equities rally on hopes of Fed rate cut

Global dollar stabilizes and equities rally on hopes of Fed rate cut

He global dollar stabilized on Friday after falling overnight as US data showed fresh signs of cooling of the labor marketMeanwhile he and in fell after suspicions of intervention last week.

He dollar indexwhich compares the greenback with a basket of six major currencies, was trading flat at 105.26 units, after falling 0.3% on Thursday.

The decline occurred after learning of an increase in initial requests for health subsidies. unemployment in USA. This data, which was added to last week’s weak payrolls report, further encouraged investors to think that the Federal Reserve (Fed) will begin to lower interest rates in the third or fourth quarter and stimulated purchases of stocks and bonds, causing yields to fall.

For his part, the dollar It gained 0.17% against the yen, at 155.73 units, without yet reaching the maximum of 155.95 reached the day before.

He euro was trading little changed at $1.0783, after rising 0.3% overnight, as investors pushed the stock higher. pound sterling following data that showed that the British economy grew more than expected in the first quarter of the year, emerging from a slight recession. The British currency advanced 0.1% to $1.2532.

Alvin Tan, head of Asia FX strategy at RBC Capital Marketstold Reuters that the dollar is unlikely to fall too much, as high rates in the United States continue to make investments attractive. US bonds. “They continue to offer the highest rates in the world. G10. So that, along with the low volatilitysuggests that the dollar will remain supported,” he said.

Stocks rally on Fed cut hopes

The world stocks rose this Friday to one-month highs, due to the confidence that the Fed will soon begin cutting its interest rate.

He MSCI index around the world rose 0.3%, since the equities of Asia and Europe benefited from the rise of Wall Street the day before, after learning that the number of applicants for unemployment benefits increased for the first time more than expected.

Rather than slowing the stock market, the numbers are giving investors confidence in the Fed’s ability to cut interest rates this year, as Europe’s central banks have begun to lower borrowing costs.

He STOXX 600 It advanced 0.8% towards all-time highs on Friday, heading towards one of its best weekly results of the year. US stock futures rose 0.3-0.4%.

“What could have been a crack in the overall market uptrend has turned into an opportunity to get long again, and that’s what we’re seeing now in May,” said David Morrison, market strategist at Trade Nation.

Source: Ambito

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