LONDON (Reuters) - The dollar stayed strong but stocks wobbled and metal markets buckled badly on Thursday, as signs that China was resorting to credit-fuelled stimulus again 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 mostly in the red as traders banked some of the recent gains that had hoisted the STOXX 600, DAX and France’s CAC40 to 1-month highs. [.EU]
Wall Street was expected to ease off a 5-month high [.N], while Britain’s Brexit-bruised pound was below $1.30 for the first time in ten months, as mixed retail figures added to 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 fell because they could not fend off another advance by the dollar which is now near a 1-year high on an aggregate basis. [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 had 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.
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