US dollar surged to new high, crushing commodities.
The US and European equities rebounded last night. The market seemed to have digested the Fed rate hike and started to position itself for a brighter outlook in the US economy, and the changes Donald Trump’s new administration could bring to the equities market.
Favourable sentiment has spread over to Asian markets this morning, as Singapore, HK and China A50 futures climbed higher before the market open.
Trump met Silicon Valley giants on Wednesday and expressed his support to the top tech companies, including Apple, Google, Facebook, Tesla, Uber, Cisco and Amazon. They discussed issues including jobs, immigration, cross-border trade and China. The move signaled Trump’s flexible approach toward the technology sector, which he hasn’t been focused on before.
The US dollar index surged 0.65% overnight to 103.15, a level not seen since 2003. USD/JPY rose to above 118.2, fuelling the rally of Japanese equities to a 12-month high.
EUR/USD slumped to its lowest level in more than a decade, extending the post-election losses. The Chinese central bank has lowered the mid-price of the Chinese yuan to 6.95 against USD, reflecting further tolerance toward a weaker currency.
Commodities prices, especially those of precious metals, have tumbled to near 12-month lows due to the strong dollar. Gold, silver and platinum broke down their key support levels last night, extending the losses. Sluggish commodity prices will likely weigh on mining, oil and gas sectors in the near term.
Gold - Cash
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