The safe-haven dollar demand reemerged after the ECB rate hike
Wall Street stocks were mostly lower on Thursday despite upbeat economic data out of the United States. The report showed that third-quarter US GDP grew at a 2.6% annualized pace, exceeding expectations. The Dow climbed 0.6%, driven higher by shares of Caterpillar and McDonald’s after the companies reported better-than-expected earnings. Meanwhile, the S&P 500 closed down 0.6% and the Nasdaq Composite lost 1.6%.
In Asia, stocks slid to snap a three-day winning streak on Friday as investor sentiment kept deteriorating ahead of the weekend. MSCI’s broadest index of Asia-Pacific shares outside Japan was 1.56% lower. The Nikkei 225 in Tokyo index lost 0.88% amid reports that the Japanese government was preparing about $490 billion in stimulus spending to help the economy cope with inflation.
European equities opened lower as market participants continued to assess the European Central Bank’s decision to raise its interest rate by 75 basis points. Of note, ECB’s Villeroy said earlier today that there is no obligation to raise rates by 75 basis points at the December meeting. Investors also digested mixed quarterly earnings. In particular, Shell and Apple saw profits exceed expectations, while Meta and Samsung disappointed. US stock index futures were lower in early pre-market deals.
Meanwhile, the US dollar has steadied after a rally witnessed on Thursday. The USD index jumped back above 110.00 as risk demand continues to wane while the euro fell across the board after a dovish hike by the ECB as Lagarde sounded somehow cautious on further tightening. As such, the DXY surged back to the 110.60 area and could regain the 111.00 mark if risk aversion intensifies in the near term.
