The USD index advanced to fresh twenty-year highs around 104.43 before retreating marginally
After a short-lived bounce, Wall Street stocks came back under selling pressure overnight, with risk-sensitive Nasdaq Composite shedding over 3% while the S&P 500 closed at the lowest level of the year. Meta Platforms, Apple and Microsoft fell about 4.5%, 5.18% and 3.32%, respectively. On the data front, April’s consumer price index showed an 8.3% jump, higher than the 8.1% increase expected. The report raised concerns over the Fed’s aggressive tightening plan, pushing riskier assets lower across the globe.
Asian stock markets fell on Thursday as investors digested the news that US inflation moderated but topped expectations last month. Adding to a downbeat tone in the region, North Korea has reported its first coronavirus case. In response, Kim Jong Un ordered all cities to lock down. In Hong Kong, the Hang Seng index finished 2.24% lower while the Shanghai Composite was down just 0.12% as Premier Li Keqiang urged officials to use fiscal and monetary policies to stabilize employment and the economy.
In Europe, stock markets opened lower today as the global sell-off continued. The pan-European Stoxx 600 index dropped 2.2% in early trade, with US stock index futures trading slightly lower as market players shift focus to the upcoming data on jobless claims and the producer price index. In individual stocks, shares of Siemens plunged 5.6% after the German company’s net income halved to 1.21 billion euros in the first quarter.
In currencies, the USD index advanced to fresh twenty-year highs around 104.43 before retreating marginally. The greenback continues to derive strong support from the risk-off environment that dominates the market amid hawkish Fed, geopolitical tensions, and worries about recession. As such, EURUSD fell back below 1.0500 to notch early-2017 lows around 1.0440 in early European deals. The next target arrives at 1.0400 and could be reached in the near term as the buck looks ready for further gains.