He dollar was trading near its highest level in two years against a basket of six major currencies, as Investors are betting that the gap between growth in the United States and the rest of the world will widenwhile Chinese stocks suffered their biggest weekly drop since 2022.
The dollar index hit its highest level since November 2022 on Thursday and the euro fell to $1.02248, also its lowest since 2022. The pound and yen also hit their lowest levels in several months.
On the session, the euro rose slightly to $1.0280, as did the pound to $1.2392, but the continued strength of the dollar dominated market sentiment.
The U.S. currency rose late last year as investors bet that President-elect Donald Trump’s policies will boost growth and inflation, leading to fewer interest rate cuts by the Federal Reserve and higher yields. US Treasury bonds.
While the yield of the notes has moved away from its highs at the end of December – that of the benchmark 10-year notes lost 2 basis points on the day, at 4.549% -, the dollar has continued to rise due to concerns about growth in other places.
“Apart from the implications of expected US protectionism under Trump, we believe that pressure is being added by the increase in (gas prices) caused by the closure of the Ukraine pipeline,” said Francesco Pesole of ING.
Wholesale gas prices in Europe hover around their highest level in more than a year, due to falling temperatures, lower levels of stored gas and the expiration of a deal to supply Russian gas to Europe through Ukraine .
This represents a headwind for European stock markets, which lost 0.3% on Friday, reversing the previous day’s gains, although oil and gas-related stocks improved.
However, S&P and Nasdaq futures gained about 0.4% on Wall Street.
The concern about Chinese growth It is also in the spotlight of investors. The blue-chip index declined 5.2% for the week, its biggest weekly drop since October 2022.
Beijing’s announcement that it will dramatically increase ultra-long-term Treasury bond financing in 2025 to spur business investment and consumer-building initiatives did little to lift spirits.
In commodities, crude oil futures fell more than 0.3% and gold was stable at $2,655 an ounce, after gaining 27% in 2024, its highest annual performance since 2010.
Source: Ambito
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