Premarket: Euro leaps above parity on ECB, world stocks hit one-week high

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European Central Bank delivered a 75-basis-point rate hike this week and struck a hawkish tone on moves to come

The euro rose back above parity to a two-week high against the U.S. dollar on Friday following a large rate hike and hawkish comments from the European Central Bank, while a weaker dollar helped world stocks rise to a one-week high.

“We have seen more hawkish comments out of central banks not only in the U.S. but globally - the Bank of England and the ECB,” said Matthias Scheiber, global head of portfolio management for multi-asset solutions at Allspring.The euro jumped 1% to $1.0102 as Germany’s two-year bond yield leapt 9 basis points to 1.417%, hitting its highest since 2011 for a second day.

European stocks rose 0.73%, helped by bank stocks on the euro zone rate hike expectations, while Britain’s FTSE 100 gained 1%, with both indexes hitting nine-day highs. “There is still a lot of tightening to come, but I guess the Fed is getting closer to the top, so we will probably see some easing in the pace of hikes, if not in this month’s meeting, maybe in the subsequent meetings,” said Shane Oliver, head of investment strategy and chief economist at AMP Capital.

 

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