Lack of alternatives set to drive dollar dominance
The dollar will retain most of its recent gains for at least another six months, according to a Reuters poll of FX strategists who for years mostly held the view the greenback would weaken.
Last trading just below a 20-year high it hit last week, the dollar index is up over 14.0% since the start of last year, with about half of those struck this year alone.
That rally shows few signs of abating as the Federal Reserve just delivered a much-anticipated 50 basis point rate hike and left the door open for several such moves in coming months to tame the highest inflation in four decades.
European stocks rally on Fed relief, encouraging earnings
European stocks rallied on Thursday, taking cues from Wall Street overnight after the Federal Reserve raised interest rates as expected but cooled aggressive tightening bets, with sentiment lifted further by a slew of upbeat earnings.
By 0709 GMT, the pan-European STOXX 600 index rose 1.8%, reversing much of the losses made so far this week.
Global stock markets jumped after the Fed raised interest rates by a widely expected 50 basis points, but Chair Jerome Powell explicitly ruled out 75 basis point hike in a coming meeting.
ECB’s Last Dove Gives Up the Fight Against July Rate Hike
The last inflation dove in the European Central Bank’s top management appeared to give up the fight against a first-rate hike in a decade, acknowledging in a newspaper interview that neither negative interest rates nor quantitative easing is appropriate right low.
“Under current circumstances, negative rates and net asset purchases may no longer be necessary,” board member Fabio Panetta told the Italian newspaper La Stampa in an interview.
OPEC+ set to stick to modest oil output rises amid price rally
OPEC+ will likely stick to modest oil output increases on Thursday arguing it is not responsible for geopolitics and supply disruptions while stressing its worries over the demand outlook due to new COVID lockdowns in China.
Delegates from the group said OPEC+ was set to agree another monthly increase of 432,000 barrels per day in its production target for June.
OPEC+ includes the Organisation of Petroleum Exporting Countries and allies such as Russia.
Under a deal reached in July last year, the group is set to increase the target by 432,000 bpd every month until the end of September, to unwind its remaining production cuts.
ECB should not raise rates in July before Q2 GDP data
The European Central Bank should not raise interest rates in July, even though the inflation outlook suggests it can gradually reduce support for the economy, ECB board member Fabio Panetta told Italian newspaper La Stampa.
While an increasing number of ECB policymakers are making the case for a rate hike at the July 21 policy meeting, Panetta pointed to the availability after it of data on the euro zone’s second-quarter economic growth.
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