Global equity markets took slight dip as dollar strengthened and as the US Treasury built-up further. The news came from various Federal Reserve officials.
Stock movement reported was as follows:
-The S&P 500 gained 2.02 points
-Nasdaq Composite showed a 13.23 points upward movement
-Dow Jones average increased by 21.77 points
-Crude Oil prices also increased since Brent showed a 0.8 percent gain closing at $41.54
-Prices of oil were also affected by WTI which showed an increase of 1.19 percent per barrel
-Gold prices fell to $1,243.60 per ounce thereby making the dollar advance further. This was the third decline in prices on a global level of the yellow metal
-Copper strengthened by 0.12 percent a tonne. This happened as the consumption from China plunged high. China which was the second largest world economy also happens to be one of the countries importing largest copper.
Jeffrey Lacker, the Richmond Fed President shared his views stating that the US inflation rate may increase in the next few years and may match the Federal Reserve’s target of 2 percent. John Williams, San Francisco Fed President stated that the bank is likely to increase the interest rates very soon and the calibration of the same will be done in April this year.
The Atlanta Fed President, Dennis Lockhart said that last week’s decision of increasing the rates was put on hold as the bank wanted to ensure that any global financial volatility had completely settled down and the decision was not taken in haste. However, the Atlanta Fed also now plans to increase the rate next month. Overall, all these factors have contributed much to support dollar thereby strengthening it by 0.29 percent against other currencies.
Other contributing factors strengthening dollar included:
- The falling of greenback by 3.1 percent. The currency fell down when Fed policymakers announced and revised the interest rate increase to two from four.
· The week was shortened due to Easter break therefore resulting with the pan-European stock to close at a lower level of 0.25 percent.
Strengthening of the dollar also resulted in falling of sterling with its value at $1.437. This did cause some worry to European Prime Minister as he struggled to keep the party together. Sterling took slight plunge so did Euro and closed the trade at $1.124.