BackDollar climbs after US data, Greece eyed
MSCI's all-country world index falls 0.11%, euro stumbles on concerns over Greece's financial crisis
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New York: The US dollar climbed on Monday after a flurry of economic data kept expectations intact for an interest rate hike from the Federal Reserve this year, while the euro stumbled on concerns over Greece’s financial crisis and soft euro zone data.
The strengthening dollar held US stocks in check and weighed on oil prices. Oil was also dented by expectations OPEC production would remain high.
Brent crude was off $1.11 at $64.45 a barrel, and US crude lost 95 cents to $59.35 a barrel.
While US economic data showed consumer spending remained flat in April, construction spending and manufacturing picked up steam, holding views steady that the Fed will begin to hike interest rates by the end of the year.
“We’ve hit this almost invisible wall in a stronger dollar, it is impacting everything," said Peter Kenny, chief market strategist at Clearpool Group in New York. “That is really the one-off that is really driving markets in terms of direction."
The US data also sent yields on US debt higher, as US 10-year notes fell 17/32 in price to yield 2.1547%.
The Dow Jones industrial average rose 32.16 points, or 0.18%, to 18,042.84, the S&P 500 gained 2.63 points, or 0.12%, to 2,110.02 and the Nasdaq Composite added 2.93 points, or 0.06%, to 5,072.96.
The dollar index was up 0.76% at 97.648 after the greenback closed out May with a 2.4% climb, its tenth monthly gain in the last 11.
The euro, off 0.86%, lost ground after Greece failed to meet a self-imposed deadline on Sunday to reach a deal with lenders, keeping the possibility open of a debt default and possible exit from the euro zone. Officials close to creditors negotiating a funding-for-reform package with Greece denied a market rumor that a deal could be announced on Monday afternoon.
The euro was also weakened by surveys that showed manufacturing activity remained soft, boosting expectations for central banks to continue to take steps to support growth.
MSCI’s all-country world index of the stock performance in 46 countries fell 0.11%. The pan-European FTSEurofirst 300 gained 0.12% to 1,588.27.34 points.
European stocks edged higher with Roche leading drug stocks higher following an encouraging company update and real estate shares getting some support from a positive sector note from JP Morgan. Reuters
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