The dollar weakened against other major currencies on Wednesday as investors awaited fresh data to determine the market’s direction. Wall Street ended the day higher, with the S&P 500 hitting a new record high. Meanwhile, gold prices saw gains, and oil prices rose due to a draw in US fuel stocks and escalating geopolitical tensions.
In Europe, government bond yields eased and companies with positive earnings reports saw gains, balancing out the slide in healthcare and energy stocks. The FTSE 100 closed up by 0.62%, while Germany’s Dax ended down by 0.65% and France’s CAC finished the day up by 0.36%.
In currency markets, the euro edged higher against the dollar as traders turned their attention to statements from US Federal Reserve officials. The focus is on gaining insights into the potential interest rate trajectory for the year ahead. British pound sterling also surged on data indicating growing home prices in Britain, leading to speculations that the Bank of England would not lower interest rates in the near future.
The Canadian dollar gained ground against the US dollar as Wall Street rallied. However, gains for the commodity-linked currency were limited due to investor caution regarding China’s efforts to stimulate its struggling economy.
The dollar eased against the yen as investors assessed Federal Reserve rate-cut bets. The probability of a US rate cut as early as May decreased significantly, and investors are now monitoring comments from Fed officials for further clues.
In the commodity markets, gold prices edged higher due to a slight pullback in the dollar. Investors are also looking forward to comments from Federal Reserve officials for insights into the interest rate path for the year. Oil prices continued to rise for the third consecutive day, supported by a larger-than-expected drop in US fuel supplies and escalating tensions in the Middle East.
Overall, the market awaits fresh data and statements from central bank officials to determine the direction of various asset classes. With geopolitical tensions and economic indicators in focus, investors are carefully navigating market conditions while seeking opportunities for growth.
