London (AFP) – The dollar recovered slightly on Wednesday as traders awaited the US Federal Reserve’s outlook on interest rates, while gold reached another record high as investors sought safety amid an uncertain economic outlook on several fronts. European stocks were mainly lower ahead of the New York open, with Amazon announcing its plan to cut a further 16,000 jobs worldwide, on top of the 14,000 cuts already announced last October.
The dollar had experienced a sell-off on Tuesday, fueled by US President Donald Trump’s suggestion that he was happy with the currency’s recent decline, which saw it fall to a four-year low of $1.20 against the euro. The greenback retreated across the board following reports that the New York Federal Reserve had checked in with traders about the yen’s exchange rate, fueling speculation of a joint US and Japanese intervention to prop up the yen. This led to talk that the White House was prepared to let the dollar weaken, and Trump did little to dismiss those notions when asked if he was worried about the decline. “No, I think it’s great,” he told reporters as the currency fell to a two-and-a-half-month low against the yen. “Look at the business we’re doing. The dollar’s doing great,” he said.
Win Thin, at Bank of Nassau 1982 Ltd, stated, “Foreign exchange typically is the leader in terms of showing market discomfort with a country’s policies and economic outlook.” Elsewhere, the price of gold struck a new peak at $5,278.30 a troy ounce (31.1 grams) as the dollar’s drop continued to support demand for the safe-haven investment. Investors also took a cautious approach ahead of the Fed’s latest policy meeting, hoping for guidance on its plans for interest rates amid uncertainty over Trump’s latest tariff threats.
The US central bank is widely expected to freeze rates in the coming months, but a weakening dollar could fan inflation in the world’s largest economy, clouding the possibility of lower rates later this year. A recent survey showed that US consumer confidence has plunged to its lowest level since 2014, as households fret about persistent inflation.
In Europe, the CAC 40 in Paris was dragged down by renewed concerns for the luxury sector after market heavyweight LVMH posted a 13 percent slide in annual profit, falling to 10.9 billion euros ($13.1 billion). LVMH shares tumbled 6.5 percent, while in London, the British fashion label Burberry lost 2.6 percent. On the upside, shares in Dutch tech giant ASML, which makes machines for semiconductors, jumped six percent after announcing a strong rise in annual profits and a buoyant outlook, while also stating it would cut hundreds of management jobs.
“ASML’s latest results suggest the AI boom is still in full swing, with strong orders and a bullish outlook,” said Russ Mould, investment director at traders AJ Bell. “However, job cuts in the business would suggest it is not getting carried away with the strength of current trading.”
– Key figures at around 1130 GMT –
London – FTSE 100: DOWN 0.5 percent at 10,160.61 points
Paris – CAC 40: DOWN 0.9 percent at 8,083.14
Frankfurt – DAX: DOWN 0.2 percent at 24,852.64
Tokyo – Nikkei 225: UP 0.1 percent at 53,358.71 (close)
Hong Kong – Hang Seng Index: UP 2.6 percent at 27,826.91 (close)
Shanghai – Composite: UP 0.3 percent at 4,151.24 (close)
New York – Dow: DOWN 0.8 percent at 49,003.41 (close)
Euro/dollar: DOWN at $1.1973 from $1.2035
Pound/dollar: DOWN at $1.3774 from $1.3833
Dollar/yen: UP at 152.67 yen from 152.32 yen on Tuesday
Euro/pound: DOWN at 86.90 pence from 86.98 pence
Brent North Sea Crude: DOWN 0.2 percent at $67.42 per barrel
West Texas Intermediate: DOWN 0.1 percent at $62.35 per barrel
© 2024 AFP
