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Global dollar trading steady after Fed signals rate cut

Global dollar trading steady after Fed signals rate cut
Global dollar trading steady after Fed signals rate cut

He dollar indexThe U.S. dollar, which measures the greenback against six other currencies including the euro and yen, was little changed at 105.09, after rising about 0.1 percent on Tuesday.

In front of and inThe dollar was up 0.1 percent at 161.515 yen as the Japanese currency remained under pressure from sharp interest rate differences between the United States and Japan.

Stocks, which have been dormant for much of the year, have been buoyed by rising expectations of a tax easing cycle. Fed which will probably begin in September, with its president, Jerome Powellsaying Tuesday that the United States is “no longer an overheated economy.”

According to the tool FedWatch According to CME, the odds of a September cut have risen to more than 70%, up from a probability of around 50% a month ago.

The futures of the S&P 500 rose 0.15%, while futures of the Nasdaq gained 0.29%, as the most heavily weighted stocks, such as the artificial intelligence chip maker Nvidia and the car manufacturer Tesla were advancing in pre-session operations.

The pan-European index STOXX 600 was up 0.6% at 10:40 GMT, led by gains in travel and leisure stocks. The index MSCI broader Asia-Pacific stocks outside Japan fell 0.08% but remained close to the more than two-year high reached earlier in the week.

Meanwhile, bond yields fell on Wednesday after cautious but encouraging comments on the inflation Powell’s, the day before.

Bond yields Euro zone fell into France and Italy in particular as investors unwound the political risk premium they had assigned to countries ahead of the French parliamentary elections, which had suggested gains for the far right.

German 10-year bond yields, the eurozone bloc’s benchmark, fell 6 basis points (bps) to 2.52%, French 10-year bond yields fell 9 bps to 3.163% and Italian 10-year bond yields fell 10 bps to 3.858%.

Yields, which move inversely to prices, had risen on European bonds in late June as investors feared that a victory by the French far right spending to soar. Italian yields also rose as investors shunned countries with high debt levels.

Source: Ambito

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