US dollar and Global Stocks rise

mm

Stocks went up all over the world on December 19 when Wall Street extended its winning streak. This positive movement has another participant- the United States dollar. The latter received a boost from Janet Yellen, the Chair of the Federal Reserve. Yellen harbors optimistic views concerning the American labor market. She made her remarks to University of Baltimore students. It could reach new highs within a 14 year period against basket of currencies. The high was touched only a few weeks before.

Shock with minimal impact

The stocks stayed up even in the middle of reports coming in that Turkey and Germany have suffered deadly attacks. A truck crashed into a Berlin crowd injuring 50 bystanders and killing nine. Report of the attacks, however, dented stocks values. A rise in Treasury prices were also seen and a firming of Yen, the safe haven currency firmed.

American stock indexes hit peak highs during the first week of December as investors betted on the notion that the much awaited fiscal stimulus by the future administration of Donald Trump will support the riskier assets. According to Jake Dollarhide of Longbow Asset Management based in Tulsa, Oklahoma, the Trump rally continues with people continuing to search for purchasing opportunities and buying stocks whenever they dip.

The DJIA or Dow Jones Industrial Average went up by 0.2 percent or 39.65 points to 19,883.06. The Standard & Poor 500 went up by about 0.2 percent or 4.46 points to 2,262.53. The Nasdaq Composite, in its turn, added 0.37 percent or 20.28 points to 5,457.44.

Rouble and Lira

The Russian rouble and the Turkish lira dropped against the US dollar when news broke about the Russian Ambassador being shot dead in Turkey. Lira went down by 0.6 percent to scrape 3.525 percent for every dollar and te Russian currency was traded at a low of 62.045 for every dollar prior to reverting to 61.854. Gains were made by the Japanese Yen, a safe haven post reports about truck attack and the Japanese ambassador being assassinated. It went up 0.75 compared to the dollar.

US Treasury prices went north after the news. Benchmark 10 year notes yielded 2.538 percent after 16/32 was achieved in price. The Nikkei stock index of Japan, which has earlier benefited from the sharp fall of the Yen compared to the dollar, snapped the nine day long winning streak. There was also a rise of 0.14 percent by MSCI all country world index.

Leave a Comment