Dollar appreciation puts pressure on the markets Wall Street loses at the end of this week's last trading session. The US500 index is losing more than 0.65% to 4,118 points and the US100 - NASDAQ is losing more than 0.80%. The session in Europe was much better. The German DAX index gained 0.55%.
Sentiments on Wall Street were spoiled mainly by lower reading from the University of Michigan. Data came at 57.7 against expectations at 63. Long-term inflation expectations came in highest since 2011. Higher than expected inflation and lower consumer sentiments suggest negative conditions for the stock market. University of Michigan reading much below expectations suggest that 'recession fears' may be justified. At the same time higher inflation expectations support further, restrictive Fed policy.
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The NZD is the worst-performing G10 currency after the RBNZ lowered its 1- and 2-year inflation expectations from 5.11 to 4.28%, while the 2-year expectations were lowered from 3.30 to 2.79%. This could be seen as a dovish move as lower inflation expectations suggest that the RBNZ is making progress in fighting inflation and may not need to extend the rate hike cycle.
The US dollar extends yesterday's rally and the EURUSD pair descends to levels not seen since April 10, 2023 at 1.0855.
The strong USD puts a lot of pressure on precious metals, silver loses over 0.9% and trades around $23.97, and platinum loses over 3.5%. Similar sentiments are on the WTI (-1.86%) and BRENT (-1.66%) oil markets.
Natural gas is doing much better, rising over 5% at the time of writing.
Under heavy downward pressure, Bitcoin continues to trade, dropping 2.5% today to levels around $26,350.
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