LONDON (Reuters) - The dollar stayed strong but metal markets buckled badly on Thursday, as signs that China was resorting to credit-fueled stimulus again and trade jitters helped drive its currency to a one-year low.
FILE PHOTO: A U.S. Dollar note is seen in this June 22, 2017 illustration photo. REUTERS/Thomas White/Illustration/File Photo
Asian shares had struggled following the moves and Europe’s bourses were also in the red as traders banked some of the recent gains that had hoisted the STOXX 600, the DAX and the CAC40 to 1-month highs. [.EU]
Britain’s Brexit-bruised pound was still suffering, falling below $1.30 for the first time in ten months, as stronger retail sales figures did little to repair the damage done by constant political turmoil and Wednesday’s weak inflation data.
The yen at 113 per dollar, euro at $1.16 and most other European currencies were all weaker too. Instead of politics though they were just unable to fend off another advance from a dollar now near a 1-year high. [/FRX]
“Sentiment right now is still very much in favor of buying the dollar,” said Crédit Agricole FX strategist Manuel Oliveri.
“It is positively correlated with risk appetite and risk appetite remains supported by the U.S. earnings season and there is a very strong notion among clients that there is further room for improvement.”
That appetite got its latest boost as S&P 500 rose to its highest in more than five months on Wednesday, the Dow Jones climbed for a fifth session and the ‘FANGs’ group of big tech giants hit fresh all-time highs. [.N]
Ongoing trade jitters and developments in China however meant Asia had been a different picture.
China central bank plans to incentivise banks to expand lending to companies, a source with
