🚀 ProPicks AI Hits +34.9% Return!Read Now

GLOBAL MARKETS-Dollar falls after non-commital Fed, earnings weigh on stocks

Published 2017-02-02, 08:44 a/m
© Reuters.  GLOBAL MARKETS-Dollar falls after non-commital Fed, earnings weigh on stocks
EUR/USD
-
XAU/USD
-
DBKGn
-
SOGN
-
GC
-
HG
-
LCO
-
ESU24
-
CL
-
DE10YT=RR
-
KS11
-
STOXX
-
MIAPJ0000PUS
-
DXY
-

* Dollar hits 12-week low after Fed statement lacks clarity

* European stocks mixed, Wall Street seen opening lower

* Bond yields fall, German-French spread in focus

* Pound dips after Bank of England says rates could rise or fall

By Marc Jones

LONDON, Feb 2 (Reuters) - The dollar slipped to a 12-week low on Thursday and European stocks traded cautiously after the U.S. Federal Reserve stuck to its mildly upbeat view of the world but gave no hint on when it will next raise interest rates.

Britain's pound nonetheless fell against the dollar and euro after the Bank of England, while raising its forecast for British growth this year, also kept policy unchanged and said rates could go either way depending on the economic outlook. stock indexes were marginally lower and U.S. index futures signalled Wall Street would open lower.

The dollar hit its lowest since mid-November against a basket of six other top world currencies .DXY after Fed policymakers, still awaiting clarity on the impact of U.S. President Donald Trump's policies, gave no firm signal on the timing of its next rate move. was not the spoon-feeding 'expect a rate hike in March' guidance the market has come to expect (from the Fed) before such changes in policy are made," Rabobank analyst Michael Every said

The euro traded 0.4 percent higher at just above $1.08 EUR= , while the Japanese yen gained 0.8 percent to 112.40 per dollar. Sterling, however, fell 0.8 percent to $1.2555 GBP=D4 . having earlier hit a seven-week high of $1.2704.

Societe Generale (PA:SOGN) FX strategist Alvin Tan said the market had been quite "bulled-up" in sterling before the BoE rate decision and forecasts on growth and inflation.

"But there weren't really any surprises. The improved outlook was expected, 9-0 (vote count to keep rates on hold) was expected, so it definitely needed a much more hawkish tone to keep it (sterling) up."

BoE Governor Mark Carney said the revised growth forecast did not mean Britain's vote to leave the European Union would be without consequences. He added an overshoot in UK inflation had been entirely due to sterling's fall since the June vote.

Rattled euro zone bond market drew some comfort from the Fed's apparent lack of urgency to push up rates. Yields fell, pulling back from multi-month highs hit after strong data and signs that inflation is picking up in the bloc. Political risks in France before a presidential election have also pressured bonds.

Benchmark German 10-year Bund yields DE10YT=TWEB fell 2.5 basis points to 0.45 percent. French yields fell 4 bps to 1.06 percent FR10YT=TWEB but the gap over German peers was near its widest level in three years on nerves about far-right Marine Le Pen polling strongly ahead of the elections in April and May.

European stocks were left flat-footed as disappointing company results, including a $7.5 billion fine for wrongdoing for Deutsche Bank DBKGn.DE sent its shares down over 5 percent pan-European STOXX 600 index .STOXX dipped 0.1 percent. S&P 500 e-mini futures ESc1 were down 0.2 percent.

Earlier, Asian shares ex-Japan .MIAPJ0000PUS hit their highest since mid-October as Korea's markets .KS11 climbed to their best level since July 2015.

Oil prices rose as signs that big producers were cutting production outweighed a sharp rise in U.S. crude and gasoline stockpiles.

Brent crude futures LCOc1 rose 32 cents to $57.12 a barrel threatening its highest level of the year,

Copper fell 0.6 percent to $5,911 a tonne CMCU3 . Safe-have gold, however, hit its highest since mid-November as the dollar weakened. Gold last traded up 1.1 percent at $1,223 an ounce XAU= .

"We've been expecting the Fed's next rate hike to come in June and there was nothing indicating a hike in March," said Shuji Shirota, head of macro strategy group in Tokyo at HSBC.

For Reuters Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.