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Euro, global stocks waver ahead of Fed meet; gold rises

Euro, global stocks waver ahead of Fed meet; gold rises
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First Published: Wed, Jun 22 2011. 10 58 PM IST
Updated: Wed, Jun 22 2011. 10 58 PM IST
New York: The euro and US stocks hovered near break-even on Wednesday on anxiety over Europe’s debt crisis and ahead of a US Federal Reserve statement that could indicate its next move to alleviate a sluggish economy.
The euro edged higher after an earlier slide against the dollar on expectations that the Fed policymakers meeting in Washington will signal US interest rates will remain low, providing support for the single European currency.
The euro gained 0.1% to $1.44279, just below the high of $1.4435 reached after the Greek government won a vote of confidence. The US Dollar Index, a basket of major trading currencies, traded sideways.
Wall Street moved between break-even and a touch higher, helped by an upbeat outlook from FedEx, whose shipping volumes are seen as a bellwether of economic activity, as investors awaited the Fed’s assessment of the US economy and any clues about plans for dealing with recent weakness. Fed chief Ben Bernanke will hold a press conference at 2.30pm, following the US central bank’s release of its policy statement at 12.15pm.
“Bernanke’s comments are important for market confidence as it will give us a sense of what is going on,” said Andrea Williams, who manages $2.11 billion assets for Royal London Asset Management.
Gold, meanwhile, rose to its highest level in nearly two months, driven by safe-haven buying sparked by worries over Greece’s debt crisis and expectations of loose monetary policies from central banks around the world.
“Gold is higher on uncertainty with the euro currency, the likelihood of additional quantitative easing from the Bank of England and expected low interest rates for a period of time in the United States,” said Phillip Streible, senior market strategist with Lind Waldock, a unit of futures broker MF Global.
Spot gold prices rose to $1,557.42 a troy ounce.
Two-year Greek bond yields fell after the government won the confidence vote, but the broader European periphery came under pressure and German Bunds rallied with a debt restructuring still seen as inevitable.
The pan-European FTSEurofirst 300 index of top shares closed down 0.4% at 1,092.29 points, while London’s FTSE 100 index fell 0.1%.
Oil extended gains after bouncing from earlier losses as the US weekly data showed a sharp fall in crude inventories and an unexpected fall in gasoline stocks.
US light crude rose 46 cents to $94.62 a barrel.
ICE Brent crude futures rose $2.31 to $113.26.
Official data from the US Energy Information Administration showed a 1.7 million barrel drop in crude oil stocks in the week to 17 June, compared with analysts’ forecast of 1.4 million barrel draw.
Reuters
Angela Moon, Gertrude Chavez-Dreyfuss, Ellen Freilich and Frank Tang in New York and Joanne Frearson, Nia Williams, Kirsten Donovan, Simon Falush, Ikuko Kurahone and Amanda Cooper in London contributed to this story.
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First Published: Wed, Jun 22 2011. 10 58 PM IST
More Topics: Markets | Euro | Fed Meet | US | Stocks |