Wall Street Posts Positive Gains As The Greenback Strengthens
Wall Street ended Wednesday with solid gains, recovering most of the losses from the previous session on the back of a big rally in tech stocks, which propelled the NASDAQ to a fresh close. Meanwhile markets were attentive to reports quoting Greek government sources that Greece and its creditors were close to beginning to draft a long awaited agreement that would release much needed bailout loans for the struggling country. Following the sell-off seen in the previous session, U.S. markets showed a substantial rebound over the course of the trading day on Wednesday. The strength of the U.S. markets was due to bargain hunting on the heels of the steep drop seen in the previous session, which came amid concerns about the outlook for interest rates. European markets ended the session in positive territory. Buying interest was generated by optimistic comments from Greek Prime Minister Alexi Tsipras regarding his nation’s negotiations with creditors.
Asian markets are trading marginally higher due to strength seen in US Dollar Index on expectations that the U.S. Federal Reserve will raise rates later this year. Also, optimism on a cash-for-reforms deal between Greece and its international creditors provided support to the Asian markets.
The greenback strengthened by 0.1 percent yesterday as comment by the Federal Reserve Chairwoman, Janet Yellen on the possibility of a rate hike this year continued to dominate market movements. The US dollar continued to rally on Thursday morning to trade at 97.41.
The euro fell below the 1.09 level to trade as low as 1.0818 but recovered to 1.09 and remains flat at this time. Euro weakened by 0.3 percent as Greek officials claim progress in its efforts to secure further funding from its international creditors which helped drive European stocks and bond prices. Also, robust consumer confidence data release from Germany was at its highest in 13.5 years thereby validating positive economic outlook.
The Japanese yen soared above the 124 level to trade at 124.10 after lackluster economic data hit the wires this morning. Retail sales in Japan advanced 5.0 percent on year in April, the Ministry of Economy, Trade and Industry said – coming in at 11.562 trillion yen. That was shy of forecasts for an increase of 5.5 percent following the 9.7 percent contraction in March. Sales from large retailers advanced an annual 8.6 percent to 1.608 trillion yen – also missing expectations for 9.1 percent after tumbling 13.1 percent in the previous month.
The Australian dollar fell to 0.7688 after business investment declined this month. The Aussie fell by 46 points while the kiwi declined to 0.7240 as traders worried about drop in dairy prices.
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