The FOMC meeting outcome could add to the selling pressure surrounding the dollar
US stock indexes finished higher overnight, notching fresh all-time highs as investor optimism surrounding vaccination reemerged. Besides, market players cheered further progress towards fiscal stimulus measures in the United States. As a result, S&P 500 picked up 0.28%, the Dow Jones Industrial Average gained 0.35%, and the tech-heavy Nasdaq added 0.5%, marking its fourth straight record high.
Asian stock markets were higher as well, buoyed by vaccination news as well as solid economic data. In Japan, preliminary machine tool orders for November rose by 8.0% versus -6.0% y/y pin the previous month while Australia’s December Westpac consumer sentiment index came in at 112.0 versus 107.7 in November. Meanwhile, China reported that its consumer price index slipped 0.5% in November compared with a year earlier, the first slip into deflation since 2009. As such, Tokyo’s Nikkei 225 index gained 1.33%, while the Hang Seng in Hong Kong added 0.69%. In South Korea, the Kospi jumped 2.02%, while the Shanghai Composite index in China finished 1.12 lower, pressured by inflation data.
In Europe, equities opened higher on Wednesday, keeping with the rhythm from Asian trading, with S&P 500 futures also up slightly on the session. Later today, British Prime Minister Boris Johnson will meet Ursula von der Leyen in an effort to resolve the remaining issues. On the data front, Germany’s exports rose 0.8% on the month after an increase of 2.3% in September, imports rose 0.3% after an upward revision in the prior month’s figure to an increase of 0.2%, while the trade surplus expanded to 18.2 billion euros.
Meanwhile, the greenback stays under pressure against major rivals as a risk-on tone dominates global financial markets on Wednesday. EURUSD climbed to the 1.2150 area earlier in the day, slightly off long-term highs registered around 1.2180 late last week. Later today, the FOMC meeting outcome could add to the selling pressure surrounding the dollar if the central bank strikes a dovish tone.
