Asian markets stabilized slightly on Tuesday after a frantic few days of falling stocks and collapsing bonds, falling sterling and a strong dollar – the dollar weakened slightly on Tuesday.
He writes about it Reuters.
The pound, which fell to a record low of $1.0327 on Monday, recovered to $1.0742.
S&P 500 futures rose 0.7%, while MSCI’s largest non-Japan Asia-Pacific equity index fell 0.1%. The Japanese Nikkei rose 0.7%.
“However, analysts were skeptical about the outlook as markets, already nervous about keeping US interest rates on hold for longer, were further pissed off by the shock to UK assets in response to government spending plans.
Britain plans to cut taxes on top of huge energy subsidies, and a lack of confidence in the strategy and its funding hit the pound on Friday and again on Monday, the agency noted.
“What’s happening in UK markets is probably just some initial stage of how the market reacts to such government news,” said Yutin Sha, macro strategist at State Street Global Markets.
“Of course, the tax cut plan itself was intended to stimulate growth, to lighten the burden on households, but it raises questions about the consequences from a monetary policy point of view,” he said. added.
The dollar index fell 0.1% to 113.8 on Tuesday after hitting 114.58 earlier, the strongest against a basket of currencies since May 2002.
The euro rose 0.3% on the day to $0.9634 after hitting a 20-year low a day earlier.
Oil and gold also partially offset the losses. Gold, which hit a 2.5-year low on Monday, rose 0.5% to $1,629 an ounce. The price of oil rose slightly from its lowest level since January.
We will remember:
British Pound on Monday fell to an all time high due to traders’ fears that the new UK government’s economic plan is creating strain in the financial sector. The euro also hit a new 20-year low against the dollar.