U.S. stocks continued their record run while the euro surprised investors with a valiant comeback. This was an especially shocking turn of events, since earlier in the week the euro was declining. Experts attribute this wild turnaround to ECB President Mario Draghi’s positive statements. These comments increased optimism, & helped the euro make an epic comeback. While the euro recovers, the pound is dipping & the yen continues to tumble. The dollar slipped slightly, while crude made some much-needed advances. Despite the Commodity Index rising, gold slipped. It’s another mixed week, let’s dive into the details!
Euro Recovers While Stocks Hold Steady
“The ECB has maintained a very supportive approach, because inflation remains too low, despite better growth prospects,” said Gilles Pradere, portfolio manager at RAM Active Investments SA.
Out of all the financial sectors, currencies stole the show with the surprise rebuttal of the euro. At first, the euro was extending a dreaded decline with an unpopular move by the central bank. The ECB deferred the decision of reevaluating their ventures towards policy normalization until next year. This was a wildly unpopular move, but wise comments from ECB President Mario Draghi managed to promote a comeback. He quickly pledged to be willing to implement additional stimulus if needed.
Immediately after he cited a timeline for policy makers to consider changes, things started fluctuating wildly. Not only did the euro reverse its slide, it hit its strongest rally in 23 months. In total it soared by 0.5%, reaching $1.1567. This was welcome news, since the euro has experienced a surprisingly rough year.
While the euro defied the odds, other major currencies weren’t as lucky. The British pound suffered a 0.4% loss, putting it at $1.2973. The Japanese yen also had a rough week, losing 0.2%. This was their largest loss in 2 weeks, & left it at 112.14 per dollar. The greenback slipped slightly, with the Bloomberg Dollar Spot Index falling less than 0.005%.
Despite the wild fluctuations in currencies, stocks around the world looked promising. The Stoxx Europe 600 Index remained unchanged, despite the euro’s aggressive comeback. The U.K.’s FTSE 100 Index gained 0.7%, which was its highest in a month. Germany’s DAX Index also increased by 0.5%, which was its largest raise in over a week. The MSCI All-Country World Index gained 0.2% in its 10th consecutive advance, its highest on record. The MSCI Emerging Market Index was also on the rise by 0.1%, reaching its highest close in over two years.
Not to be outdone, American stocks continued a welcome winning streak. U.S. stocks advanced Wednesday’s record close, with two platforms reaching record highs. The Nasdaq 100 Index & Nasdaq Composite Index both enjoyed 0.1% raises, which let them hit unprecedented heights. The S&P 500 Index was up less than 0.1%, which allowed it to continue a record close.
While the overall outlook with commodities is positive, gold & oil had mixed reactions. West Texas Intermediate crude rose 0.8%, putting it at $47.49 a barrel. Gold wasn’t as lucky, falling 0.1% to $1,240.35 an ounce. Overall investors remain positive, since the Bloomberg Commodity Index rose 0.4%. This was its biggest climb in 8 weeks, putting it on track for a record comeback.
All things considered, the market is doing great. There’s a growing sense of optimism amongst investors which is rippling through the market. If this trend continues, 2017 will be a banner year for financial sectors around the globe.