The USD index regained the upside momentum to register fresh long-term highs around 101.90
US stock markets finished yesterday’s session with gains as bond yields retreated, albeit gains were limited as China-related worries continued to persist. Still, the S&P 500 added 0.6%, the Dow Jones Industrial Average advanced 0.7%, and the tech-heavy Nasdaq Composite Index rose 1.3%. In individual stocks, Twitter shares jumped more than 5,5% after the social-media company accepted Elon Musk’s $44 billion takeover deal.
Asian equity markets were mixed on Tuesday, with the Shanghai Composite losing 1.44% in reaction to the news that Beijing has expanded COVID-19 testing to the whole of the city. Meanwhile, the IMF said that the Asian region faces stagflationary outlook with growth being lower than previously expected. Meanwhile, Hong Kong’s Hang Seng finished nearly unchanged while Japan’s Nikkei 225 added 0.41%.
In Europe, stocks opened in positive territory in a catch up play to the gains in the US. The pan-European Stoxx 600 index opened 0.4% higher. In individual stocks, shares of HSBC fell 1.6% after the bank reported a 27% decline in quarterly profit, citing a slowdown in growth in Hong Kong. Of note, Wall Street futures are turning lower again, suggesting risk-on trades are yet to reemerge.
In currencies, the USD index regained the upside momentum to register fresh long-term highs around 101.92 in recent trading, sending the euro to the lowest levels since the early days of the pandemic in march 2020. EURUSD derailed the 1.0700 mark to extend losses to 1.0680 during early deals in Europe. Later in the day, fresh economic data out of the US (durable goods orders, new home sales and CB consumer confidence) could add to dollar’s bullishness, thus pressuring the common currency further.