U.S. stocks and US$ off on geopolitical angst; sterling, gold soar

  • U.S. stocks and US$ off on geopolitical angst; sterling, gold soar

U.S. stocks and US$ off on geopolitical angst; sterling, gold soar

It then saw a broadly flat day on Wednesday as parliament voted to approve the election, but has begun to pick up again on Thursday, gaining more than 0.3% on the dollar in morning trading to hit $1.2825, matching highs not seen since October 2016.

The dollar index traded near three-week lows today, dragged down by a resurgent sterling after British Prime Minister Theresa May called for an early general election ahead of Brexit negotiations.

French opinion polls show that far-right leader Marine Le Pen and centrist Emmanuel Macron qualifying next Sunday for the May 7 run-off, but the gap with conservative Francois Fillon and far-leftist Jean-Luc Melenchon has been tightening.

Weighing on the dollar were also bank comments: while Deutsche Bank said the surprise United Kingdom election call is a "game-changer" for sterling, Goldman Sachs analysts exited long dollar bets against the euro and pound, citing a pickup in global growth.

The FTSE 100 fell 0.1 percent to 7,142.30 while France's CAC 40 rose 0.2 percent to 4,999.18 and Germany's DAX gained 0.2 percent to 12,025.24.

Concerns about North Korea and the French presidential elections also pressured the dollar against the yen, which is traditionally viewed as a haven for capital in times of political and economic stress.

Copper CMCU3 lost 2.11 percent to $5,572.00 a tonne.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.6 percent to the lowest since mid-March.

We at FxWirePro now expect the pound to move higher against the dollar.

Meanwhile, expectations of a June rate hiked edged lower amid weaker than expected economic data and softer USA economic growth expectations, after Treasury Secretary Steven Mnuchin admitted that the Trump administration no longer expects to complete tax reform by August.

U.S. Treasury Secretary Steven Mnuchin was quoted saying in the Financial Times that Trump is "absolutely not" trying to talk down the strength of the U.S. dollar, playing down remarks by Trump in an interview last week when he said the dollar was "getting too strong".

Oil prices were weighed by concerns that US production growth is undermining efforts to cut oversupply after a USA government report said shale oil output in May was expected to post the biggest monthly increase in more than two years.

Brent crude was last little changed at $54.93 a barrel, while USA crude was also steady at $52.42. Yields on 10-year Treasury paper sank to 2.17 percent, a world away from the 2.629 peak seen in March.

Despite these tensions, Wall Street posted its first session of gains in four, as investors turned their attention to first-quarter corporate earnings.

Spot gold added 0.4 percent to $1,289.50 an ounce.