The US dollar has been advancing north for the ninth session in a row
Wall Street stocks fell on Friday as rate hike fears resurfaced, halting in the summer rally. The S&P 500 slid 1.29%, the Dow Jones Industrial Average tumbled 0.86%, and the Nasdaq Composite dropped 2.01%. For the week, the S&P 500 closed 1.21% lower, the Dow Jones fell 0.16% while the Nasdaq dropped 2.62%, as technology stocks had some of the biggest losses. Now, investors are looking ahead to the Federal Reserve’s annual Jackson Hole conference in Wyoming due this week.
Asian stock markets were mostly lower on Monday even as China cut an interest rate that affects mortgage lending. The central bank cut its one-year benchmark lending rate by 5 basis points to 3.65% and its five-year rate by 15 basis points to 4.3%. The Shanghai Composite Index rose 0.61% while the Nikkei 225 in Tokyo sank 0.47%. The Hang Seng in Hong Kong shed 0.42% and the Kospi in Seoul fell 1.21%. MSCI’s broadest index of Asia-Pacific shares outside Japan was off 0.4%.
In Europe, stocks retreated on Monday amid renewed fears of more aggressive interest rate hikes from the Federal Reserve. The pan-European Stoxx 600 slipped 0.3% in early trade, with US stock index futures losing ground as well. Investor sentiment shows they expect the Fed’s Jackson Hole meeting to bring a hawkish message. As such, risk aversion is likely to continue in the days to come.
Meanwhile, the US dollar extend the ascent, advancing north for the ninth session in a row. The USD index has settled just below the 108.50 zone, holding onto solid gains around mid-July highs. Against this backdrop, EURUSD is challenging parity for the for time in more than a month and could threaten multi-year lows seen last month around 1.0950 should the pressure persist in the near term.