The dollar rose again this Monday, October 10, driven by solid employment data in the United States, while stock markets fell in both New York and Europe.
(See: Potato, meat, beer: this is how inflation affects their prices).
The greenback, which has already reached multi-year highs against the euro and other currencies, continues to rise as investors they expect US jobs numbers, released on Friday, as well as inflation data to be released this week, to keep the plan of the Federal Reserve (Fed, central bank) to sharply increase interest rates.
“If inflation remained stubbornly high, it would threaten to disrupt the market and float the dollar“Joe Manimbo said in a note from Convera.
Analysts said Monday’s dollar gains also reflect the worsening of the conflict between Russia and Ukraine, which has reinforced the dollar’s position as a ‘safe haven’ investment.
(See: Risk of global recession in 2023 increases: reasons for the World Bank alert).
It will also be a busy week in terms of company earnings announcements in the United States.
Investors are cautious as rising costs are expected reduce corporate profits.
“We have two big catalysts to come, inflation and earningssaid Adam Sarhan of 50 Park Investments.
(See: Why the ‘boom’ of raw materials is not enriching Latin America).
“Anyone who wanted to sell has already sold short and now it’s just a wait and see approach over the next few days until we get some clarity“, he added.
Dollar
istock
Analysts project that S&P 500 companies increase their earnings by 2.9% per share, down from the 10.5% forecast in June, according to CFRA Research.
“We are seeing mild risk aversion in the markets at the start of the week, perhaps some apprehension ahead of what could be a big few days for the USsaid market analyst Craig Erlam of Oanda.
Meanwhile, the British pound remains weak as London increased its efforts to calm markets after a highly criticized budget.
(See: The meals with which they try to face the food crisis).
In what was seen as a coordinated move, the UK government brought forward the release date of major economic forecasts and the Bank of England boosted liquidity.
“With the pound remaining weak and government borrowing costs rising to worrying levels again, the UK executive and the Bank of England launched a two-pronged attempt to calm markets.said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
On the other hand, oil prices fell after last week’s strong increase driven by the production restrictions of the Organization of Petroleum Exporting Countries and its allies (Opec+).
In London, the barrel of Brent, for December delivery, it fell 1.76% to $96.19. while in New York the barrel of West Texas Intermediate (WTI), for delivery in November, fell 1.63%, to 91.13 dollars.
AFP
