Forexlive Americas FX news wrap: US dollar climbs as risk appetite slumps | Forexlive
Markets:
- Gold up $1 to $1874
- WTI crude oil up $1.34 to $78.48
- US 10-year yields down 4.4 bps to 3.63%
- S&P 500 down 46 points to 4117, or 1.1%
- Nasdaq down 1.7%
- GBP leads, CAD lags
The corporate world deserves much of the blame for price action on Wednesday as the mood coming into the day was negative after some earnings misses. That said, Uber said it hadn’t seen any sign of consumer weakness so there’s some reason for optimism there; there’s also reason for pessimism because the market is starting to think rates will need to go up further and stay there for longer. The handful of Fed speakers today didn’t offer up any big headlines along those lines but they all showed some level of openness to more hikes, albeit with data dependency as the main theme.
Perhaps the biggest driver in the negative mood was Google as its AI demo was a bit of a flop, including an inaccurate answer to a question in the demo. Shares of the company fell 7.5% with Microsoft going after its bread-and-butter. The AI revolution will bring productivity enhancements but it will also spark disruption.
The poor mood in equities didn’t cause huge ripples in FX because the market is also seeing better global growth. That limits the downside for trades like AUD/USD, which fell 34 pips to 0.6924.
Cable is generally tightly correlated to stocks but it went against the trend today, gaining a quarter cent, though all of the move was early in Europe.
The euro finished on the lows of the day but down just 10 pips.