The USD exchange rate surged during Wednesday’s trade, thanks to prospects for stronger North American economic growth, although stock markets declined broadly as home resales fell severely.
On Wall Street, shares declined as the S&P 500 generating its biggest daily decline since Oct. 11. Reports presented agreements to buy formerly owned U.S. homes declined in the last month to their deepest level in the last twelve months, a signal that increasing interest rates could be pondering on the housing market.
The Dow Jones Industrial Average declined 0.56% to 19,833.68, while the S&P 500 fell 0.84% to 2,249.92.
The Dollar index surged on sustained bets that the Fed will raise rates in the next year by three times to maintain with inflation. “This is just a continuation of the trend” of dollar strength, said Axel Merk, president and chief investment officer of Palo Alto, California-based Merk Investments.
The dollar index soared almost 0.23%. The Euro conversion rate declined 0.43% and the British pound currency rate plunged 0.39%.
Euro zone bond yields declined considering concerns over the power of a rescue strategy for Italian banks. In addition, U.S. Treasury yields declined to their bottommost levels in the last two weeks.
On the other hand, Oil prices surged for a fourth straight day, finishing at the highest level of the last eighteen months. However, oil prices ease in Asian trade on Thursday, thanks to higher than expected growth in U.S. inventories. A looming supply cut from many major producers is expected to give crude prices support. OPEC and non-OPEC producers are likely to begin their production cut plan in the next week, which is likely to slash global supplies by 1.8 million barrels a day.