Dollar sinks and global stocks extend record run

The Advertiser

5 hours ago

The dollar has sunk to a three-year low while world stocks notched their second record high in three days as a report that Donald Trump was planning to choose the next Federal Reserve chief early fuelled fresh bets on US rate cuts.
Dollar selling continued after the Wall Street Journal said the US president - who has been urging the Fed to cut rates faster - was toying with the idea of selecting Chair Jerome Powell's replacement in the next few months before his formal departure in May 2026.
It left the greenback down more than 10 per cent for 2025.
If it stays that way in the coming days it will be its biggest first half of a year fall since the early 1970s - effectively the era of free-floating currencies.
European shares edged higher again, buoyed by signs that the Israel-Iran ceasefire appeared to be holding and that European Union leaders were preparing to set their stance for US trade tariff talks ahead of a Trump-imposed deadline of July 9.
The region's flagship STOXX 600 index was up 0.2 per cent on Thursday while MSCI's record-high world stocks benchmark was up 0.4 per cent, leaving it almost eight per cent ahead for 2025.
The euro jumped 0.6 per cent to $US1.173, its strongest since 2021.
"The striking thing on the dollar trend of the last six weeks is that in almost any market regime the dollar is struggling to appreciate," State Street's Michael Metcalfe said.
"It seems to be in something of structural decline," he said, highlighting State Street data that investors were now the most negative they have been on the dollar - or "underweight" in banking speak - since the COVID pandemic.
Euro traders also took heart from the outcome of Wednesday's NATO summit that saw the bloc's members of the alliance agree to spend five per cent of output on defence - broken down into 3.5 per cent on troops and weapons and 1.5 per cent on looser, defence-related measures.
Overnight in Asia, Tokyo's Nikkei jumped 1.65 per cent to its highest level since January, while MSCI's broadest index of Asia-Pacific shares outside Japan finished slightly higher too.
In currency markets, the Swiss franc firmed to a decade-high while the Japanese yen also strengthened again to below 144 per dollar.
There are growing expectations that the Fed will soon be cutting US rates again following recent patchy data, but Trump's criticism of it for not moving quick enough has been escalating too.
He has repeatedly targeted Fed chief Powell, and his idea of naming a successor well before Powell leaves office would effectively create a shadow over the head of the US central bank that could undermine him.
The dollar index, which measures the US currency against six rivals, now sits at its lowest level since March 2022 following its slide in 2025.
The two-year US Treasury yield, which typically moves in step with interest rate expectations, was down 1.5 basis points at 3.764 per cent, its lowest level in seven weeks.
In commodities, oil prices rose on Thursday after their sharp slump following the Trump-brokered ceasefire early this week between longtime Middle East foes Israel and Iran.
Brent crude futures rose 0.37 per cent to $US67.93 a barrel, while US West Texas Intermediate crude gained 0.45 per cent to $US65.21.
The dollar has sunk to a three-year low while world stocks notched their second record high in three days as a report that Donald Trump was planning to choose the next Federal Reserve chief early fuelled fresh bets on US rate cuts.
Dollar selling continued after the Wall Street Journal said the US president - who has been urging the Fed to cut rates faster - was toying with the idea of selecting Chair Jerome Powell's replacement in the next few months before his formal departure in May 2026.
It left the greenback down more than 10 per cent for 2025.
If it stays that way in the coming days it will be its biggest first half of a year fall since the early 1970s - effectively the era of free-floating currencies.
European shares edged higher again, buoyed by signs that the Israel-Iran ceasefire appeared to be holding and that European Union leaders were preparing to set their stance for US trade tariff talks ahead of a Trump-imposed deadline of July 9.
The region's flagship STOXX 600 index was up 0.2 per cent on Thursday while MSCI's record-high world stocks benchmark was up 0.4 per cent, leaving it almost eight per cent ahead for 2025.
The euro jumped 0.6 per cent to $US1.173, its strongest since 2021.
"The striking thing on the dollar trend of the last six weeks is that in almost any market regime the dollar is struggling to appreciate," State Street's Michael Metcalfe said.
"It seems to be in something of structural decline," he said, highlighting State Street data that investors were now the most negative they have been on the dollar - or "underweight" in banking speak - since the COVID pandemic.
Euro traders also took heart from the outcome of Wednesday's NATO summit that saw the bloc's members of the alliance agree to spend five per cent of output on defence - broken down into 3.5 per cent on troops and weapons and 1.5 per cent on looser, defence-related measures.
Overnight in Asia, Tokyo's Nikkei jumped 1.65 per cent to its highest level since January, while MSCI's broadest index of Asia-Pacific shares outside Japan finished slightly higher too.
In currency markets, the Swiss franc firmed to a decade-high while the Japanese yen also strengthened again to below 144 per dollar.
There are growing expectations that the Fed will soon be cutting US rates again following recent patchy data, but Trump's criticism of it for not moving quick enough has been escalating too.
He has repeatedly targeted Fed chief Powell, and his idea of naming a successor well before Powell leaves office would effectively create a shadow over the head of the US central bank that could undermine him.
The dollar index, which measures the US currency against six rivals, now sits at its lowest level since March 2022 following its slide in 2025.
The two-year US Treasury yield, which typically moves in step with interest rate expectations, was down 1.5 basis points at 3.764 per cent, its lowest level in seven weeks.
In commodities, oil prices rose on Thursday after their sharp slump following the Trump-brokered ceasefire early this week between longtime Middle East foes Israel and Iran.
Brent crude futures rose 0.37 per cent to $US67.93 a barrel, while US West Texas Intermediate crude gained 0.45 per cent to $US65.21.
The dollar has sunk to a three-year low while world stocks notched their second record high in three days as a report that Donald Trump was planning to choose the next Federal Reserve chief early fuelled fresh bets on US rate cuts.
Dollar selling continued after the Wall Street Journal said the US president - who has been urging the Fed to cut rates faster - was toying with the idea of selecting Chair Jerome Powell's replacement in the next few months before his formal departure in May 2026.
It left the greenback down more than 10 per cent for 2025.
If it stays that way in the coming days it will be its biggest first half of a year fall since the early 1970s - effectively the era of free-floating currencies.
European shares edged higher again, buoyed by signs that the Israel-Iran ceasefire appeared to be holding and that European Union leaders were preparing to set their stance for US trade tariff talks ahead of a Trump-imposed deadline of July 9.
The region's flagship STOXX 600 index was up 0.2 per cent on Thursday while MSCI's record-high world stocks benchmark was up 0.4 per cent, leaving it almost eight per cent ahead for 2025.
The euro jumped 0.6 per cent to $US1.173, its strongest since 2021.
"The striking thing on the dollar trend of the last six weeks is that in almost any market regime the dollar is struggling to appreciate," State Street's Michael Metcalfe said.
"It seems to be in something of structural decline," he said, highlighting State Street data that investors were now the most negative they have been on the dollar - or "underweight" in banking speak - since the COVID pandemic.
Euro traders also took heart from the outcome of Wednesday's NATO summit that saw the bloc's members of the alliance agree to spend five per cent of output on defence - broken down into 3.5 per cent on troops and weapons and 1.5 per cent on looser, defence-related measures.
Overnight in Asia, Tokyo's Nikkei jumped 1.65 per cent to its highest level since January, while MSCI's broadest index of Asia-Pacific shares outside Japan finished slightly higher too.
In currency markets, the Swiss franc firmed to a decade-high while the Japanese yen also strengthened again to below 144 per dollar.
There are growing expectations that the Fed will soon be cutting US rates again following recent patchy data, but Trump's criticism of it for not moving quick enough has been escalating too.
He has repeatedly targeted Fed chief Powell, and his idea of naming a successor well before Powell leaves office would effectively create a shadow over the head of the US central bank that could undermine him.
The dollar index, which measures the US currency against six rivals, now sits at its lowest level since March 2022 following its slide in 2025.
The two-year US Treasury yield, which typically moves in step with interest rate expectations, was down 1.5 basis points at 3.764 per cent, its lowest level in seven weeks.
In commodities, oil prices rose on Thursday after their sharp slump following the Trump-brokered ceasefire early this week between longtime Middle East foes Israel and Iran.
Brent crude futures rose 0.37 per cent to $US67.93 a barrel, while US West Texas Intermediate crude gained 0.45 per cent to $US65.21.
The dollar has sunk to a three-year low while world stocks notched their second record high in three days as a report that Donald Trump was planning to choose the next Federal Reserve chief early fuelled fresh bets on US rate cuts.
Dollar selling continued after the Wall Street Journal said the US president - who has been urging the Fed to cut rates faster - was toying with the idea of selecting Chair Jerome Powell's replacement in the next few months before his formal departure in May 2026.
It left the greenback down more than 10 per cent for 2025.
If it stays that way in the coming days it will be its biggest first half of a year fall since the early 1970s - effectively the era of free-floating currencies.
European shares edged higher again, buoyed by signs that the Israel-Iran ceasefire appeared to be holding and that European Union leaders were preparing to set their stance for US trade tariff talks ahead of a Trump-imposed deadline of July 9.
The region's flagship STOXX 600 index was up 0.2 per cent on Thursday while MSCI's record-high world stocks benchmark was up 0.4 per cent, leaving it almost eight per cent ahead for 2025.
The euro jumped 0.6 per cent to $US1.173, its strongest since 2021.
"The striking thing on the dollar trend of the last six weeks is that in almost any market regime the dollar is struggling to appreciate," State Street's Michael Metcalfe said.
"It seems to be in something of structural decline," he said, highlighting State Street data that investors were now the most negative they have been on the dollar - or "underweight" in banking speak - since the COVID pandemic.
Euro traders also took heart from the outcome of Wednesday's NATO summit that saw the bloc's members of the alliance agree to spend five per cent of output on defence - broken down into 3.5 per cent on troops and weapons and 1.5 per cent on looser, defence-related measures.
Overnight in Asia, Tokyo's Nikkei jumped 1.65 per cent to its highest level since January, while MSCI's broadest index of Asia-Pacific shares outside Japan finished slightly higher too.
In currency markets, the Swiss franc firmed to a decade-high while the Japanese yen also strengthened again to below 144 per dollar.
There are growing expectations that the Fed will soon be cutting US rates again following recent patchy data, but Trump's criticism of it for not moving quick enough has been escalating too.
He has repeatedly targeted Fed chief Powell, and his idea of naming a successor well before Powell leaves office would effectively create a shadow over the head of the US central bank that could undermine him.
The dollar index, which measures the US currency against six rivals, now sits at its lowest level since March 2022 following its slide in 2025.
The two-year US Treasury yield, which typically moves in step with interest rate expectations, was down 1.5 basis points at 3.764 per cent, its lowest level in seven weeks.
In commodities, oil prices rose on Thursday after their sharp slump following the Trump-brokered ceasefire early this week between longtime Middle East foes Israel and Iran.
Brent crude futures rose 0.37 per cent to $US67.93 a barrel, while US West Texas Intermediate crude gained 0.45 per cent to $US65.21.