The British pound plunged to a record low as dollar surged further
Wall Street stocks plunged last Friday to finish a brutal week on negative footing in another downswing in the ongoing bear market amid aggressive tightening by the Fed and looming recession. The Dow Jones Industrial Average tumbled 1.62% to close below 30,000 for the first time since mid-June. The S&P 500 slid 1.72%, while the Nasdaq Composite dropped 1.8%. For the week, the S&P and Nasdaq shed 4.65% and 5.07%, respectively, while the Dow gave up 4%. Elsewhere, the 2-year and 10-year Treasury rates hit highs not seen in over ten years.
Asian markets extended their losing streak to trade mostly lower at the start of the week, as investors remained concerned the aggressive monetary tightening by global central banks. The Nikkei 225 in Japan dropped 2.66%, South Korea’s Kospi tumbled 3.02%, Australia’s S&P/ASX 200 declined 1.60%. MSCI’s broadest index of Asia-Pacific shares outside Japan was nearly 1.5% lower. In mainland China, the Shanghai Composite fell 1.2%.
In Europe, equities opened lower on Monday as economic outlook in the region continued to deteriorate. The pan-European Stoxx 600 dipped 0.5% in early trade. The FTSE 100 index, however, bucked the trend to gain 0.4% as the British pound plunged to a record low on Monday. The overall risk mood keeps more defensive as markets stay in bearish mood. US stock index futures are also down in early pre-market deals, reflecting continued pressure on equities at the moment.
Meanwhile, the US dollar surged across the board to refresh multi-year tops, this time above the 114.00 mark. The USD index climbed to the 114.50 zone before retreating marginally. Still, the prices stayed in positive territory on the daily charts. Risk aversion coupled with the Fed’s aggressive rate hikes keep supporting the buck. As such, EURUSD dipped to the 0.9550 zone before recovering back above 0.9600. Bullish attempts will likely stay limited in the near term as the dollar remains elevated and resilient.
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