Recommended NZ | Guide to Money | Gimme: Competitions - Giveaways

Dollar slumps on Fed testimony, commodities and shares surge - CMC Markets

Contributor:
Fuseworks Media
Fuseworks Media

By Michael McCarthy (chief market strategist, CMC Markets and Stockbroking)

Federal Reserve chair Jerome Powell clearly flagged the first US interest rate cut since 2008 in testimony to the House of Representatives overnight. Citing trade risks and persistently low inflation, he discounted recent stronger data. Markets reacted accordingly. The US dollar reversed recent strength and shares rallied as interest rate markets reflected a 100% probability of a down move on July 31.

Commodity markets featured. Gold rallied back towards recent highs around US $1,430. Energy markets retained their "most volatile" status with a 4.5% jump in crude oil prices. Base metals echoed the market shift, and aluminium and copper traded 1.5% to 2% higher on global exchanges.

An overnight sag in European shares may contain bullish trading today. French industrial production surprised traders with a 4% lift in May, but investors remained unimpressed and major indices finished in the red. The British Pound is in focus after weaker manufacturing data trapped it near two-year lows.

Asia Pacific markets are set for only modest opening gains, despite the American enthusiasm. Japanese investment numbers and Australian home lending data could influence the session.

.

All articles and comments on Voxy.co.nz have been submitted by our community of users. Please notify us if you believe an item on this site breaches our community guidelines.