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Wednesday, July 6, 2022

Dollar weakens on Trump criticism; stocks tepid

Dollar weakens on Trump criticism; stocks tepidNEW YORK: The US dollar weakened on Friday against key world currencies as President Donald Trump complained again about its strength, while US and European stock markets were tepid amid fresh tariff talk and another round of corporate earnings.

US government bond yields rose as Trump repeated his criticism a day earlier of the Federal Reserve’s policy on raising interest rates, saying it takes away from the United States’ “big competitive edge.” He also lamented the strength of the dollar and accused the European Union and China of manipulating their currencies.

The dollar was on pace for its biggest single-session drop in three weeks against a basket of major currencies, stalling a rally that had driven the greenback to a year high.

“The dollar is an important issue today especially because we have been on a rise for quite a long time,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.

The dollar index, tracking it against six major currencies, fell 0.59 percent, with the euro up 0.57 percent to $1.1707.

On Wall Street, the Dow Jones Industrial Average rose 41.81 points, or 0.17 percent, to 25,106.31, the S&P 500 gained 4.14 points, or 0.15 percent, to 2,808.63 and the Nasdaq Composite added 31.92 points, or 0.41 percent, to 7,857.21.

“The dollar going down typically tends to lift equities and I think that is partly why we have seen a little bit of a turnaround today,” Frederick said.

Microsoft shares rose, boosting indexes after a strong earnings report, while General Electric shares sank after the conglomerate cut a key financial target.

In the latest trade salvo, Trump said he was ready to impose tariffs on all $500 billion of imported goods from China.

MSCI’s gauge of stocks across the globe gained 0.45 percent, helped by Asian markets .

The pan-European FTSEurofirst 300 index lost 0.13 percent, amid rising trade tensions.

European auto shares, sensitive to trade tensions as US officials work towards slapping tariffs on car imports, fell 2.1 percent.

Benchmark 10-year US notes last fell 12/32 in price to yield 2.8894 percent, from 2.847 percent late on Thursday.

Benchmark Brent crude stabilized as a weakening dollar and lower expected August oil exports from Saudi Arabia supported the market, overtaking concerns about US-China trade tensions and supply increases.

US crude rose 0.81 percent to $70.02 per barrel and Brent was last at $73.15, up 0.79 percent on the day.

Copyright Reuters, 2018

Source: Brecorder

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