Less than twenty fours following yesterday’s Fed announcement, and the big dollar is higher along with equities around the world. It is a risk-on time in financial markets in the wake of the first Fed interest rate hike in almost ten years. An initially skittish reaction morphed into euphoria as the market’s digested the Fed’s words and any lingering uncertainty had been exorcised from the marketplace. Mostly second and third tier data was littered throughout the overnight session so it’s all about the Fed for now – North America poised to keep the good times rolling with a higher open.
Overnight, the euro slumped about 1%, weighed down by a stronger dollar and less than stellar IFO data. German IFO data fell below expectations as the business climate, current expectations and current conditions all missed estimates. The market seems to be looking passed these numbers for now, as Germany’s DAX index surged higher by nearly 2% following bourses around the world. Sterling did it’s best to fight the greenback after much stronger than expected retail sales. It was reported that retail sales in the UK are up 5% versus one year ago, versus expectations of a 3.2% increase. On the month, British retail sales were higher by 1.7%. Despite these figures, sterling lost a bit of ground and is now trading below key psychological levels.
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