US stocks in bear market, Australian dollar sold off

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The Dow Jones index enters a bear market while the Bank of England says it will not hesitate to raise interest rates. The Australian dollar is sold off again on the surging greenback.

abc.net.au/news/asx-wallstreet-markets-currencies-commodities/101476114Wall Street has fallen further into a bear market as interest rates surged after the British pound fell to a record low against the greenback and recession fears have deepened on global markets.The Dow Jones index fell 1.1pc to 29,261, the Nasdaq fell 0.6pc to 10.803, and the S&P 500 index lost 1pc to 3,655

Investors are worried that steep interest rate rises by global central banks could cause a global economic downturn and recession in the US. Yields on US government bonds hit new highs on concerns that central banks will keep raising interest rates to curb high inflation.Investor confidence was shaken by dramatic moves in the foreign exchange market as the British pound hit a record low yesterday on worries about the new UK government's tax cut plan and how it would be paid for.

The pound fell as much as 5 per cent against the greenback to a record low of $US1.0327 in Asian trade, it pared most of its losses in European trade on hopes of an emergency rate rise by the Bank of England.UK finance minister Kwasi Kwarteng sent sterling and government bonds into freefall on Friday after delivering a mini budget by funding tax cuts with huge increases in government borrowing.

 

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