The dollar declines as the euro, yen and British pound rise
European stocks and US stock futures rose on Thursday, after stock markets suffered a sell-off on Wednesday, while the dollar fell as the euro, yen and pound sterling retreated.
The Stoxx 600 index of European stocks rose 0.57 percent, after falling in the previous three sessions, about 1.2 percent overall, according to Reuters.
Britain’s FTSE 100 index rose 0.78 percent. Germany’s DAX index added 0.65 percent.
Nasdaq futures rose 0.73 percent after Tesla shares jumped 12 percent in after-hours trading, after the electric car maker announced strong third-quarter profits that surprised analysts with expectations to sales growth between 20 and 30 percent next year.
Standard & Poor’s 500 futures rose 0.41 percent after the stock index fell 0.9 percent on Wednesday.
Deutsche Bank chief strategist Jim Reed said: “Sentiment has become more positive with Tesla delivering a strong set of results in the third quarter. ” The automaker now expects a slight increase in deliveries this year.
Corporate earnings reports also helped boost confidence in Europe, with Renault, Unilever and Hermes shares rising after the results were released.
In Asia, the Nikkei index in Tokyo rose 0.1 percent, but the Hang Seng index in Hong Kong and major Chinese stocks fell more than 1 percent, following Wall Street’s decline.
On the other hand, the dollar index fell 0.23 percent, with the pound sterling, the euro and the yen rising. The index, which measures the value of the dollar against 6 currencies, rose to a 3-month high of 105.47 on Wednesday.
A string of strong US data and less pessimistic communications from US Federal Reserve officials have significantly reduced the chances of cutting interest rates in the coming months.
Tensions in the markets have increased due to growing expectations that US presidential candidate Donald Trump, who may increase inflationary trade taxes, could return to the White House.
The euro in recent trade rose 0.14 percent to $1.0797, recovering slightly after falling to a 3-month low on Wednesday.
A slightly better-than-expected reading of the German Purchasing Managers’ Index, a measure of private sector health, gave the euro a small boost. But limited gains in the Eurozone Purchasing Managers’ Index (PMI) were weaker than expected.
The British pound rose 0.31 percent to $1.2963, supported by a rise in British government bond yields as prices fell, after a news report indicated that Finance Minister Rachel Reeves would give herself more room to borrow in next week’s budget.
Meanwhile, the dollar fell 0.5 percent against the yen to 152 after a rapid rise in recent days.
In bond markets, the yield on the benchmark 10-year US Treasury bond fell about 5 basis points to 4.196 percent, down from a 3-month high of 4.26 percent recorded on Wednesday.
Pimco economist Tiffany Wilding cautioned against over-interpreting the recent rise in bond yields, saying historical patterns suggest that the change in bond yields did not result in 10- a year a month after the first interest rate cut by the Federal Reserve, a regular indication of the size of further cuts.
However, strong economic data led traders to question whether the Federal Reserve could cut interest rates more deeply at each of its two meetings this year. Money market prices show a discount of only about 40 basis points this year.
Oil, which declined due to a sharp rise in US crude inventories, pared some of its losses, with Brent crude futures contracts rising 1.61 percent to $76.17 a barrel.
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2024-10-24 11:13:00
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