Traders shift focus to the Fed’s meeting that could add to dollar’s strength this week
US stocks plunged on Friday, with the tech-heavy Nasdaq Composite falling by more than 4.0% as investors digested Amazon earnings. The e-commerce giant saw its biggest one-day drop since 2006 as the company reported a surprise quarterly loss. Adding to a downbeat tone, Intel fell nearly 7% after the company revealed weak guidance for its fiscal second quarter. The S&P 500 lost 3.6%, and the Dow Jones Industrial Average shed 2.8%.
Asian stocks were mostly lower in thin trading on Monday amid a holiday in many markets, with persistent worries about elevated inflation and the prospect of aggressive tightening by central banks unnerving investors globally. Market players are getting more cautious ahead of this week’s Fed meeting as the bank is expected to raise rates by 50 basis points. Japan’s Nikkei 225 slid 0.11% and South Korean Kospi fell 0.28%. Markets in China and Hong Kong are shut for holidays.
In Europe, equities opened 0.7-1.0% lower, catching up with sharp moves on Wall Street on Friday. German DAX 30 gave up 1% after the data showed that retail sales came in at -2.7% in March versus 7.0% recorded in February. The UK’s FTSE 100 is closed for a public holiday. US stock index futures are trending higher in early pre-market trading.
Meanwhile, the dollar looks resilient after some downside correction amid profit-taking on Friday. The USD index is holding above the 103.00 figure, adding 0.37% on the day as risk-off tone has abated but continues to persist across the markets. Also, traders shift focus to the Fed’s meeting that could add to dollar’s strength this week. EURUSD failed to regain the 1.0600 mark on Friday to come under renewed selling pressure that has been capped by 1.0510 today.
