With the dollar shuddering to a stop on Thursday and a computer virus wreaking havoc on firms throughout the world, what does this mean for your finances?
The dollar shuddered to its low for the year on Thursday as a drumbeat of hawkish comments from major central banks signaled the era of easy money might be coming to an end for more than just the United States. And at the same time, America’s top banks passed the Fed’s annual checkup, including the so-called qualitative portion that has tripped them up before, explain RAKBANK.
Meanwhile, a computer virus threw majors corporations and some governments in free fall on Wednesday as it spread to more than 60 countries, disrupting ports from Mumbai to Los Angeles and even halting work at a chocolate factory in Australia.
The dollar index, which tracks the greenback against a basket of six major rival currencies, was down 0.1% at 95.843, plumbing its lowest levels since October and well below highs above 97.0 hit earlier this week. Sterling added to gains made after Bank of England Governor Mark Carney said on Wednesday that the central bank is likely to need to raise interest rates as the British economy comes closer to operating at full capacity. The pound was up 0.2% at $1.2955 after rising to $1.2977 earlier, its highest since June 9. The euro was up 0.3% at $1.1410 after scaling a peak of $1.1420, despite evidence that positioning for a dramatic scaling-back of stimulus might have been overdone. The Australian dollar rose 0.2% to $0.7656 after earlier touching $0.7664, its highest since late March. The Canadian dollar was trading at C$1.3030 to the greenback, or 76.75 U.S. cents, up 1.3%, its biggest advance since mid-March. The currency’s weakest level of the session was C$1.3198, while it touched it’s strongest since Feb. 16 at C$1.3010
Long-dated U.S. Treasury prices weakened on Wednesday as central banks in Europe were deemed to strike a more hawkish tone, even after reports that markets had misinterpreted comments by European Central Bank President Mario Draghi on Tuesday. Benchmark 10-year notes fell 7/32 in price to yield 2.22%, up from 2.20% late on Tuesday. The yields rose as high as 2.256 before the ECB reports. The yield curve between five-year notes and 30-year bonds steepened to 95.8 basis points after falling to 91.9 basis points overnight, the lowest since late 2007.
Gold held firm on Thursday as the U.S. dollar hovered near 10-month lows on bets that central banks in Europe and Britain are preparing to scale back monetary stimulus. Spot gold was nearly flat at $1,249.58 per ounce. U.S. gold futures for August delivery rose 0.1% to $1,249.70 per ounce. Crude oil rose for a sixth straight session on Thursday to its highest since June 19 on a decline in U.S. output, but ongoing worries about global oversupply continued to drag. U.S. West Texas Intermediate crude had risen 28 cents, or 0.6%, to $44.01 per barrel, while benchmark Brent futures gained 28 cents, or 0.6%, to $47.59 a barrel.
Wall Street stock rallied sharply on Wednesday; with the benchmark S&P 500 index scoring its biggest one-day percentage gain in about two months, as financial and technology stocks led a broad market rebound. The Dow Jones Industrial Average rose 143.95 points, or 0.68%, to 21,454.61, the S&P 500 gained 21.31 points, or 0.88%, to 2,440.69 and the Nasdaq Composite added 87.79 points, or 1.43%, to 6,234.41. Asia followed on Thursday with Japan’s Nikkei adding 0.5% and Australia 0.8%. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.8 % to its highest since May 2015. Asia followed on Thursday with Japan’s Nikkei adding 0.5% and Australia 0.8%. MSCI’s broadest index of AsiaPacific shares outside Japan rose 0.8% to its highest since May 2015.
Stocks prone to speculative trade dragged Dubai’s equity index down on Wednesday while Egypt’s blue chip developer Talaat Mostafa outperformed on news its former chairman has been pardoned and named chief executive. Dubai’s index fell 0.7% in the lowest daily volume in one year. In Abu Dhabi, some large caps, which were the main drag on the bourse earlier in the session, reversed course and helped, take the index 0.4% higher. Kuwait’s index closed flat in very thin trade. Blue chip banks outperformed with Warba Bank adding 1.2% while Boubyan Petrochemical lost 1.0%.