The euro hit a fresh two-decade low on Tuesday, dealt a fresh blow by renewed concern that an energy shock will keep inflation elevated and makes a recession in Europe all but certain.China's yuan weakened to a two-year low, while sterling briefly touched its weakest since March 2020.
Russia will halt natural gas supplies to Europe via the Nord Stream 1 pipeline for three days at the end of the month, the latest reminder of the precarious state of the continent's energy supply. Against a basket of currencies, in which the euro is the most heavily weighted, the U.S. dollar index pulled back from session highs and was last trading at around 108.93.
The energy sector was the only one in the green in the stock market as crude scaled $91 a barrel, lifted by the possibility of OPEC+ output cuts. Doubts are creeping in about bets that the Fed will temper monetary-policy tightening, expectations that had helped to lift investor sentiment. For instance, hedge funds in a key part of the derivatives market have made record wagers that the US central bank will stick to a hawkish script.
“How high can the Fed technically hike their interest rate? Is a 4%-5% fed funds rate realistic?” she said, underlying the sobering challenge that lies ahead. According to a trading statement released on Monday, the group is finalising its interim financial results, expected to be released on or about 29 August.Stocks sank Monday and the dollar rallied on renewed concerns about Federal Reserve plans to ramp up interest rates to combat runaway inflation.
A dip in price rises and signs of economic slowdown had raised hopes policymakers would ease up -- and possibly cut rates next year -- after two successive, 75-basis-point hikes, helping equities rally globally. Jonathan Millar of Barclays said it was unlikely Powell would signal a slowdown in rate hikes this week.
But Shanghai rose after China's central bank cut prime loan rates as it tries to bolster the world's second-biggest economy, which has been ravaged by lockdowns as part of a zero-Covid strategy.London, Paris and Frankfurt all fell in early trade. Both main contracts tumbled Monday and wiped out all the gains seen in reaction to the start of conflict in eastern Europe.
Purchasing managers’ indexes due Tuesday will likely show private-sector output shrinking for a second month, adding to signs that a recession in the 19-nation euro zone is now more likely than not.Germany, Europe’s largest economy, has emerged as the region’s weak spot, with its outsized industrial base suffering disproportionately from surging energy costs and a persistent shortage of supplies.
Business Business Latest News, Business Business Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: Fin24 - 🏆 21. / 63 Read more »
Source: SABCNews - 🏆 37. / 51 Read more »