Dollar slumps to 15-month low as risk-on mood continues
investmentnews.comThe risk-on mood in markets stretched into another day as stocks climbed and the dollar weakened to a 15-month low.
European shares extended Wednesday’s rally, which saw the Stoxx 600 Index surge 1.5%. Swatch Group AG, the maker of Omega and Longines watches, jumped more than 6% as China’s reopening fueled a rise in profits. Watches of Switzerland Group Plc, the biggest retailer of Rolex watches in the UK, soared 10%. US equity futures rose after solid gains on Wall Street.
Investors are piling back into equities as concerns over higher interest rates and a potential recession ease. The European benchmark is in the midst of its longest rising streak since mid-April and has almost erased its second-half losses. Data Wednesday showed the US inflation rate slid to a two-year low, while a report on US producer prices due later today is expected to show a decline from a year ago.
“The US CPI data raises hopes that the Federal Reserve is going to be able to bring down inflation without steering the US economy into a recession,” said Nigel Green, the CEO of DeVere Group, who sees opportunities in tech and infrastructure-related stocks as the economy recovers. “We believe the Fed has pulled off the perfect soft landing.”
The MSCI Asia Pacific Index headed for the highest close in more than three weeks, with stocks in Hong Kong recording some of the biggest gains. Chinese Premier Li Qiang met with senior executives from firms including Alibaba Group Holding Ltd. and ByteDance Ltd., a sign that the government is ending its crackdown on the technology industry.
Some top money managers said the dollar is poised for further losses as US exceptionalism wanes. Hedge funds turned net sellers of the dollar for the first time since
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