(MENAFN- Gulf Times) European stock markets and Wall Street advanced yesterday as Britain prepared to trigger Brexit and investor concern eased over whether Donald Trump will be able to push through his economy-boosting agenda after last week's healthcare debacle.
But the dollar struggled to bounce back against major rivals with uncertainty surrounding the pace of future US interest rate rises.
'Nothing much happened this afternoon, the market caught between Monday's Trump-dive and tomorrow's Article 50-triggering, said Spreadex analyst Connor Campbell.
Equities across the world mostly slid on Monday after Trump's repeal of Obamacare fell at the first hurdle as he failed to garner enough votes from his own Republican party, which controls both houses of Congress.
The failure fuelled worries Trump would not be able to drive his much-vaunted tax-cutting, infrastructure spending, deregulation plans, with analysts pointing out it would leave the administration with less cash to pay for such measures.
Hopes for his stimulus plan helped fuel a surge in global markets and in the dollar since the November election.
European markets meanwhile also worry about the fallout from London launching Britain's exit from the European Union.
London's FTSE 100 gained 0.7% at 7,343.42, Frankfurt's DAX 30 was up 1.3% at 12,149.42 and in Paris, CAC 40 rose 0.6% at 5,046.20 at the close yesterday.
'Whether the momentum can be maintained remains to be seen however as investors remain cautious ahead of the UK government's likely triggering of Article 50 tomorrow, said Andy McLevey, head of dealing at stockbroker Interactive Investor.
Prime Minister Theresa May today is set to formally notify the European Union of Britain's intention to leave the bloc in a process that has caused a steep plunge in the value of the pound against the euro and dollar.
The dollar hit at four-month lows against the yen yesterday, while the euro has been buoyed by upbeat data out of the eurozone.
Weighing on the greenback were comments from the head of the Chicago branch of the Federal Reserve Charles Evans that it might only need to raise borrowing costs twice this year considering an uncertain outlook for inflation and Trump's big-spending and tax-cutting agenda.
The yen has climbed more than 7% against the dollar since the start of the year while the single currency is up about 5%. Even the pound, which was battered last year by Britain's vote to leave the European Union, has risen 5% from its January lows.
The US unit had already been under pressure after Fed boss Janet Yellen said this month that the pace of rate rises would be slower than initially expected.
'The market will be interested or hoping (vainly) for new insights from Fed chair Yellen's address later yesterday, said David de Garis, director of fixed income, currencies and commodities at National Australia bank.
MENAFN2803201700670000ID1095351757
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.