The dollar slumped against all its major peers after the Federal Reserve gave investors little fodder to change their views on the pace of U.S. interest-rate hikes. Global equities retreated as investors scrutinized mixed earnings from corporate heavyweights.
The U.S. currency dropped toward the lowest close since November, resuming declines after gaining for the first time in three days on Wednesday. European stocks dropped with S&P 500 futures as Deutsche Bank AG and Daimler AG fell after reporting results. Oil halted its gains above $ 53 a barrel while gold advanced. Japan's 10-year yield rose to the highest in a year.
The Fed reiterated its intention to lift rates gradually as the labor market tightens, acknowledging rising confidence among U.S. consumers and businesses. Investors will now be looking toward Friday's jobs report after the uncertainty created during Donald Trump's first two weeks in office brought equity indexes down from record highs.
"The dollar continues to be on the backfoot," said Mitul Kotecha, head of Asia currency and rates strategy at Barclays Plc in Singapore. "You have U.S. officials effectively trying to talk the dollar down at the same time the consensus long positions in the dollar continue to be pared back and U.S. yields are struggling to push much higher. There's also some uncertainty over Trump's policies, around the exact path of U.S. policy."
Earnings are coming thick and fast, with mixed results clouding the picture on the state of the global economy. While Facebook Inc.'s sales topped forecasts, Sony Corp. and Mazda Motor Corp. cut their profit outlooks. In Europe, Deutsche Bank and Shell missed estimates. Due later on Thursday are earnings from Amazon.com Inc.
Read our Markets Live blog here.
What's coming up in the markets:
- Bank of England Governor Mark Carney faces a delicate balancing act when policy makers meet to decide interest rates on Thursday. The BOE is expected to raise predictions while keeping the key interest rate at a record low and bond purchases unchanged.
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Economists expect a 175,000 increase in U.S. nonfarm payrolls for January, in line with the recent trend, when the Labor Department releases jobs data on Friday. With both hiring and unemployment likely to remain relatively stable, the focus on the jobs report will center on wage pressures.
Here are the main market moves on Thursday:
Currencies
- The Bloomberg Dollar Spot Index lost 0.4 percent as of 8:07 a.m. in London. The South Korean won and Taiwanese dollar gained the most among major peers, advancing more than 0.9 percent. The dollar has dropped 3.7 percent since Jan. 3.
- The euro added 0.2 percent to $ 1.0792 while the British pound was flat.
- The yen climbed 0.4 percent to 112.77 per dollar, after dropping Wednesday for the first time in three days. The Japanese currency last month had its best performance since June, gaining 3.7 percent.
- The Aussie rose 0.9 percent to 76.51 U.S. cents as the government's trade surplus unexpectedly climbed to a record. The currency has rallied 1.5 percent over the past five sessions.
Stocks
- The Stoxx Europe 600 Index declined 0.5 percent. The benchmark measure jumped 0.9 percent on Wednesday, buoyed by results from Siemens AG and Volvo AB.
- Futures on the S&P 500 lost 0.4 percent, after the underlying gauge rose less than one point to close at 2,279.42 on Wednesday. That halted a four-day slide that was the longest since the November election.
- The MSCI Asia Pacific Index slipped 0.1 percent, with more than two stocks declining for every one that advanced. Japan's Topix index fell 1.1 percent while Hong Kong's Hang Seng lost 0.6 percent. Singapore's Straits Times Index retreated 0.8 percent from the highest level since October 2015.
- China markets were closed for the final day of Lunar New Year holidays.
Commodities
- West Texas Intermediate crude futures slipped 0.2 percent to $ 53.75 a barrel, after jumping 2 percent on Wednesday. The biggest expansion of U.S. stockpiles in three months countered output cuts by Russia, the largest non-OPEC member that's joined the group in cutting production.
- Gold added 0.4 percent to $ 1,214.67 an ounce, resuming gains after halting a three-day rally on Wednesday.
Bonds
- Japanese 10-year yields rose two basis points to 0.12 percent. That's the highest level since the Bank of Japan introduced negative interest rates a year ago.
- The yield on the 10-year U.S. Treasury note was little changed at 2.47 percent, after adding two basis points on Wednesday.
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