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Dollar rallies, equities gain in unsettled trading on US recovery hopes

Published 26/03/2021, 07:41 am
© Reuters.
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(Updates through close of U.S. trading)

By David Randall

NEW YORK, March 25 (Reuters) - The dollar rallied to four-month highs and global equity benchmarks edged higher Thursday as investors looked past rising coronavirus cases in Europe and focused on signs that the U.S. economy was rebounding from the pandemic faster than anticipated.

Oil prices sank after surging on Wednesday when a container ship became stuck in the Suez Canal. The ship may block the vital shipping lane for weeks. L1N2LN0AX

U.S. President Joe Biden held his first formal news conference Thursday in which he reiterated that his next major bill will address infrastructure and said that he would now double his Administration's vaccination rollout plan after reaching the previous goal of 100 million shots 42 days ahead of schedule. L1N2LN26K

"U.S. stocks finished the day on a strong note as Biden clearly laid out a plan that supports U.S. growth exceptionalism in the near-term," said Edward Moya, senior market analyst at currency trading firm OANDA.

European markets edged lower following the biggest rise in new coronavirus cases in Germany since Jan. 9 and the largest number of patients with COVID-19 requiring intensive care in France so far this year. dollar index =USD hit its highest since November overnight, at 92.697, breaking its 200-day moving average.

The dollar index =USD rose 0.298%, with the euro EUR= down 0.4% to $1.1765.

"The dollar is absolutely critical," said James Athey, investment director at Aberdeen Standard Investments. "If the dollar starts rallying, that becomes a problem. It means commodity weakness and emerging-market weakness and it starts to provide a disinflationary countervailing narrative."

MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.14% following modest gains in Europe and mixed trading in Asia.

On Wall Street, the Dow Jones Industrial Average .DJI rose 200.81 points, or 0.62%, to 32,620.87, the S&P 500 .SPX gained 20.59 points, or 0.53%, to 3,909.73 and the Nasdaq Composite .IXIC added 15.79 points, or 0.12%, to 12,977.68.

Weighing on sentiment was a selloff in Chinese technology shares amid concern they will be delisted from U.S. exchanges on worries about a semiconductor shortage.

China's blue-chip CSI300 index .CSI300 edged 0.05% lower to its lowest close since Dec. 11, weighed by jitters about policy tightening and rising tensions between China and Western countries over allegations of human rights abuses in Xinjiang.

Benchmark 10-year notes US10YT=RR last fell 2/32 in price to yield 1.6191%, from 1.614% late on Wednesday.

The number of Americans filing new jobless claims fell to a one-year low last week, a sign the U.S. economy is on the verge of stronger growth as its vaccine rollout accelerates. L1N2LM2FD

"We're getting a little softness in the markets on virus-variant jitters, but we're buyers on weakness as the economy gets closer to a full-scale reopening," said Cliff Hodge, chief investment officer for Cornerstone Wealth.

U.S. crude CLc1 fell 4.38% to $58.50 per barrel and Brent LCOc1 was at $61.71, down 4.19% on the day.

Spot gold XAU= dropped 0.4% to $1,726.96 an ounce, while bitcoin slid 3.5%.

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http://tmsnrt.rs/2EmTD6j

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