He global dollar and the global actionsmainly technology stocks, fell on Friday as investors’ fears of a drop in payrolls were confirmed. USA, a day after an unexpected slump in the manufacturing sector raised fears of a deceleration in the world’s largest economy.
He dollar index fell against a basket of other major currencies and closed at 104.205 units.
He and in strengthened, pushing the dollar down 0.2% to 149.04, building on gains following the decision by the Bank of Japan (BoJ) raising rates and strengthening to 148.51 overnight for the first time since mid-March.
He Swiss franc rose about 0.2% to 0.8707 per dollar, having hit its highest level since early February at 0.8698.
“What we’re seeing this morning is a continuation of what we saw yesterday, which is that markets are taking a very risk-averse tone since the manufacturing data from USA“said Michael Brown, market strategist at Pepperstone in London. “In the case of the yen, there is obviously still a reduction in the carry trade and there is also safe-haven demand,” he added.
A gauge of U.S. manufacturing activity fell to an eight-month low in July as new orders fell, the U.S. Department of Labor said Thursday. Institute of Management of Supplies (ISM)), which sent stock prices on Wall Street plummeting and bond prices soaring.
Traders now see a near 70% chance that the Federal Reserve (Fed) cut interest rates by 50 basis points in September, up from 22% the day before, according to the tool FedWatch from the CME Group.
Investor unrest is felt across global markets
The NYSE extended its losses on Friday after the release of data on the labor market in USAwhich slowed more than expected in July, while the unemployment rate rose to a three-year high.
The three main indices of Wall Street plummeted, losing 2.2% overall, following the release of employment figures. Nasdaq fell 2.43%, weighed down by the collapse of Intel (-27%), which had previously announced massive layoffs.
According to official data released on Friday, the US unemployment rate stood at 4.3% in July, compared with 4.1% in June, and only 114,000 jobs were created, compared with 179,000 in the previous month. The deterioration in the labour market was much greater than expected by analysts.
The fall began in Asia with a 5.8% drop in Nikkei Japan. The decline, the largest daily decline since the Covid-19 crisis in March 2020, extended across Europe.
Shares of the American chipmaker Intel fell more than 20% in premarket trading on Friday after the group suspended its dividend and revealed plans to cut 15% of its workforce. The artificial intelligence chipmaker Nvidiaone of the biggest contributors to the tech rally, fell 3% in premarket trading. European tech stocks fell 4.6%.
He VIX indicator The volatility of the US stock market, known as the Wall Street fear gauge, rose to its highest level since April and the US Treasury bonds rose as traders flocked to benchmark debt securities seen as safe havens.
“The historical experience is that changes in the labor market can occur quickly and brutally, and that relatively moderate increases in unemployment have been sufficient to trigger recessions in USA“said the American economist SEBElisabeth Kopelman.
Source: Ambito
