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Euro scales 3-year dollar pinnacle on German deal hopes
NEW YORK, Jan 13, 2018 (BSS/AFP) – The European single currency surged
Friday to a three-year peak against the dollar as German Chancellor Angela
Merkel moved closer to a new coalition government.
The euro’s advance came as most global equity markets pushed higher, with
US stocks again surging to fresh records as earnings season got underway amid
optimism following tax reform.
Near 2140 GMT, the euro was at $1.22, up 1.4 percent on news that Merkel’s
conservatives have reached a “breakthrough” deal with Germany’s second
biggest party, the Social Democrats, toward building a new coalition.
In the all-night negotiations in Berlin, Merkel and her Christian
Democrats, Horst Seehofer of her Bavarian allies the CSU, and Social
Democrats (SPD) chief Martin Schulz hammered out a 28-page paper that will
form the basis for the talks ahead.
The euro “jumped to its highest level in three years as the improving
political sentiment in Germany and the upbeat comments from the ECB yesterday
are fuelling the rally,” said market analyst David Madden at CMC Markets UK.
“Merkel is one of the biggest proponents of the eurozone project, and her
ability to remain in power will be key to ensuring stability as we go
forward,” said IG analyst Joshua Mahony.
European bourses also finished higher, with Frankfurt rising 0.3 percent
and Paris 0.5 percent.
In the US, meanwhile, investors continued to aggressively add to stock
holdings. All three major US indices finished at records, with the broad-
based S&P 500 winning 0.7 percent.
Many analysts believe the market has not yet priced in the higher profits
that the corporate tax cut is expected to generate.
“Over time they will have to revise their estimates for earnings higher,”
said Hugh Johnson of Hugh Johnson Advisors.
Most large technology shares also rose, with Apple, Amazon, Google-parent
Alphabet and Microsoft all winning one percent or more.
MORE/MR/1050 hrs
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But Facebook sank 4.5 percent after announcing a plan to update its
newsfeed to emphasize posts from friends and family over other content.
The shift prompted fears it could drive away advertisers if people spend
less time on the social network.
– Key figures around 2140 GMT –
New York – DOW: UP 0.9 percent at 25,803.19 (close)
New York – S&P 500: UP 0.7 percent at 2,786.24 (close)
New York – Nasdaq: UP 0.7 percent at 7,261.06 (close)
London – FTSE 100: UP 0.2 percent at 7,778.64 points (close)
Frankfurt – DAX 30: UP 0.3 percent at 13,245.03 (close)
Paris – CAC 40: UP 0.5 percent at 5,517.06 (close)
EURO STOXX 50: UP 0.4 percent at 3,607.98 Tokyo – Nikkei 225: DOWN 0.2
percent at 23,653.82 (close)
Hong Kong – Hang Seng: UP 0.9 percent at 31,412.54 (close)
Shanghai – Composite: UP 0.1 percent at 3428.94 (close)
Euro/dollar: UP at $1.2200 from $1.2030 at 2200 GMT Thursday
Pound/dollar: UP at $1.3737 from $1.3537
Dollar/yen: DOWN at 110.98 yen from 111.29 yen
Oil – Brent North Sea: UP 61 cents at $69.87 per barrel
Oil – West Texas Intermediate: UP 50 cents at $64.30 per barrel
BSS/AFP/MR/1050 hrs