Inflation concerns continue to persist globally
Wall Street stocks closed lower for a second straight day overnight amid persisting inflation concerns. On the data front, U.S. home builders started construction on homes at a seasonally adjusted annual rate of 1.57 million in April, representing a 9.5% decrease from the previous month. The Dow Jones Industrial Average fell by 0.78%, the S&P 500 ended with a loss of 0.85%, and the Nasdaq Composite slipped 0.56%.
Tracking a decline on Wall Street, Asian shares fell on Wednesday, with investors awaiting the release of minutes from the latest Federal Reserve policy-setting meeting. Australia’s S&P/ASX 200 fell nearly 2% despite the report showed the country’s wage price index rose more than expected in the first quarter. Japan’s Nikkei 225 shed 1.28%, while China’s Shanghai Composite fell 0.51%. Markets in Hong Kong and South Korea were closed for holidays.
In Europe, equities opened lower as well, tracking losses in Asia and on Wall Street. Ahead of the FOMC meeting minutes, investors are watching out for any indications on whether the central bank is considering a shift in its accommodative monetary policy. Meanwhile, U.K. data showed consumer prices rose 1.5% on the year in April, twice the rate of inflation reported in March. The UK’ FTSE 100 shed over 1% in early trade.
Meanwhile, the selling pressure surrounding the greenback has eased somehow as risk sentiment deteriorated. As such, EURUSD retreated from fresh peaks at 1.2245 but still was last seen trading marginally above the 1.2200 figure. USDJPY regained upside momentum following a bounce from the 20-DMA and was clinging to the 109.00 figure in recent trading. Later in the day, the FOMC meeting minutes could affect dynamics in USD-pairs.