New York, (UrduPoint/Pakistan Point News – Aug 25, 2022): European and US stocks mostly rose on Wednesday as investors awaited signals on upcoming Federal Reserve interest rate hikes.
With central bankers meeting in Jackson Hole this week, the focus is on what US Federal Reserve chief Jerome Powell will say on Friday about the ongoing campaign to tackle high prices.
Many fear that higher borrowing costs in its fight to contain inflation could send the world’s largest economy into recession.
The euro fell near a two-decade low against the dollar before rebounding, and the greenback hit a two-year high against the Chinese yuan.
Gas prices in Europe soared to more than 300 euros per megawatt-hour just as stock markets closed, ahead of another temporary halt in Russian gas pipeline deliveries to Germany.
U.S. natural gas prices also continued to rise to post-2008 highs.
“European markets traded lackluster today as rising gas prices serve to contain any attempt to push higher sharply,” said market analyst Michael Hewson at CMC Markets UK.
– ‘A lot of tightening’ – Stocks on Wall Street ended a three-day slide, with the broad-based S&P 500 rising, but expectations rose ahead of Powell’s speech.
Oanda analyst Edward Moya said “the Fed still has a lot of tightening to do.” “Today’s rebound is weak and on light volume, which means most traders are playing the game of waiting until Fed Chairman Powell’s speech at the Jackson Hole Symposium,” he said. -he declares.
“Powell’s fight against inflation could push the US economy into recession late next year, but for now he must stick to the hawkish scenario.” Central banks face a delicate balancing act between tackling inflation – with Russia’s war in Ukraine pushing up energy prices – and avoiding recession.
Still, concerns are growing that soaring energy costs could yet cause a global slowdown.
Major Asian markets fell on Wednesday.
In Europe, London lost 0.
2% but Frankfurt and Paris posted modest gains.
– Rollercoaster – The forex market has been on a rollercoaster ride so far this week.
The euro fell to $0.9901 on Tuesday – a new two-decade low – but then recovered its losses as the greenback was hit by tepid US economic data.
The dollar had strengthened this week ahead of Powell’s speech, on the expectation that the Fed will continue to tighten monetary policy.
Higher interest rates boost the US currency as they make dollar-denominated debt more attractive to investors.
But the euro was also weighed down by a gloomy outlook for the euro zone economy, amid fears of a gas supply halt from Russia.
Oil prices faltered on recent gains on talks of an OPEC production cut, with Brent crude pushing back above $100 a barrel.
Oil prices had fallen below $100 this month on fears of a global economic slowdown and the possibility that Iran could reach a deal on its nuclear program that would end international sanctions on its exports of crude and boost global supply.
– Key figures around 8:00 p.m. GMT – New York – Dow Jones: UP 0.2% to 32,969.23 points (closing) New York – S&P 500: UP 0.3% to 4,140.77 (closing) New York – Nasdaq: UP 0.4% to 12,431.53 (closing) EURO STOXX 50: UP 0.3% to 3,667.46 London – FTSE 100: DOWN 0.2% to 7,471.51 (closing ) Frankfurt – DAX: UP 0.2% to 13,220.06 (closing) Paris – CAC 40: UP 0.4% to 6,386.76 (closing) Tokyo – Nikkei 225: DOWN 0.5% to 28,313.47 (closing) Hong Kong – Hang Seng Index: DOWN 1.2% to 19,268.74 (closing) Shanghai – Composite: DOWN 1.9% to 3,215.20 (closing) Euro/dollar: UP to 0.9967 from 0.9970 Tuesday Pound/dollar: DOWN to 1.1797 from 1.1836 Euro/pound: HIGH to 84.49 pence from 84.23 pence Dollar/yen: HIGH to 137.06 Yen against 136.36 yen