The London Stock Exchange building. Picture: REUTERS/TOBY MELVILLEThe dollar hit three-month highs against the euro and world stocks slipped on Wednesday after a jump in US inflation fuelled the expectation of a quicker end to Federal Reserve stimulus, while a drop in China’s crude imports dampened oil.
“This isn’t surprising that the market is concerned about inflation, our view is still that most of it is transitory,” said Seema Shah, chief strategist at Principal Global Investors, adding that she did not expect the Fed to start tapering its bond-buying programme until early next year. European stocks fell 0.34% after hitting record peaks on Tuesday, with Germany down 0.24% and France off 0.15%.
S&P futures were steady after the S&P 500 index lost 0.35% on Tuesday. The Dow Jones Industrial Average fell 0.31% and the Nasdaq Composite dropped 0.38% overnight. The New Zealand dollar shot up 1% as markets bet that a New Zealand rate hike is imminent after the central bank on Wednesday unexpectedly announced it would end its bond purchase programme from next week.
The dollar index, which tracks the greenback against a basket of currencies of other major trading partners, nudged down 0.16% to 92.643 after rising as high as 92.832 — just below the 92.844 level reached last week for the first time since April 5.The pound rose 0.28% against the dollar after the high UK inflation data.