The dollar could see further pressure amid expectations that the Fed may pause future interest rate hikes
US stocks rallied on Tuesday as Treasury yields tumbled after consumer sentiment data came in lower than expected. Also, in a sign of a cooling US econony, another survey showed a decline in job openings in July. Weak data pushed up hopes for a less hawkish Federal Reserve. The tech-heavy Nasdaq Composite gained 1.74%, the S&P 500 gained 1.45% and the Dow Jones added 0.85%. In individual stocks, Nvidia led the charge of rising tech stocks. The chipmaker gained more than 4% to notch record highs during the session.
Cheering Wall Street gains, Asian equities advanced on Wednesday. Australia’s ASX 200 was the best performer among its regional peers, adding over 1% after fresh data showed that inflation eased more than expected last month. Meanwhile, Chinese shares lagged their broader peers, with the Shanghai Composite index adding less than 0.1%. should the upcoming data show continued weakness in Chinese business activity through August, the index may see solid pressure later in the week. In Japan, the Nikkei 225 gained 0.38%, while South Korean Kospi added 0.35%.
In Europe, equities were mostly little changed at the open on Wednesday as investor sentiment turns more tentative, mirroring the tepid mood in US stock index futures ahead of the ADP employment data later in US trading. The US economic docket will also feature July goods trade balance and GDP data for the second quarter. The pan-European Stoxx 600 index was up 0.2% in early deals, with most sectors trading in slightly positive territory.
In currency markets, the US dollar holds its ground early on Wednesday after yesterday’s solid losses suffered amid a decline in Treasury yields after weak economic data out of the US. The USD index fell back below the 104.00 figure to find some support around 103.50 earlier today. Now, the greenback looks steadier in anticipation of fresh economic reports due this week. Should the numbers continue to surprise to the downside, the dollar could see further pressure amid expectations that the Fed may pause future interest rate hikes.
