The euro climbed back above parity and hit a three-week high against the dollar on Friday, following a big interest rate hike and dovish comments from the European Central Bank, while futures on US stocks pointed to a higher open on Wall Street.
* The euro gained 1.2% for the week after the ECB raised rates by a record 75 basis points the day before and signaled further increases to combat inflation, even as the economy in the European Union faces a recession in the boreal winter.
* Recession is not inevitable, but the risk of it occurring has increased, European Economy Commissioner Paolo Gentiloni said on Friday.
* For his part, the chairman of the Federal Reserve, Jerome Powell, said Thursday that the entity is “strongly committed” to controlling inflation, but that he hopes to be able to do so without the “very high social costs” that these struggles entailed. in the past.
* “We’ve seen more aggressive comments from central banks, not just in the US, but globally: the Bank of England and the ECB,” said Allspring’s Matthias Scheiber. “You can see it in short-term interest rates.”
* The euro was up 0.73% at $1.0065, a little below previous highs but far from a two-decade low of $0.9864 hit earlier in the week. The dollar was down 0.74% against a basket of six major currencies.
* The yield on two-year US Treasuries was down 2 basis points at 3.4733%.
* S&P 500 futures rose 0.8% and Nasdaq futures 1.1% after Wall Street’s main indexes posted modest gains the day before, following sharp sell-offs earlier in the week.
* MSCI’s world stock index was up 0.7%, hitting a nine-day high and heading for a weekly gain of 1.7%.
* European stocks rose 1.5%, helped by bank stocks on expectations of rate hikes in the euro zone, while Britain’s FTSE 100 also rose 1.5%.
* Sterling rose 0.8% against the dollar after Britain’s new leader, Liz Truss, on Thursday announced a cap on consumer energy bills for two years to cushion the economic impact of the war. in Ukraine.
* The dollar was down 1.5% against its Japanese pair at 141.94 yen, retreating from recent 24-year highs.
* MSCI’s broader index of Asia-Pacific stocks excluding Japan improved 1.5%, driven by a 2.7% gain in Hong Kong’s Hang Seng Index and a 1.4% gain in Chinese stocks. . Japan ‘s Nikkei gained 0.5%.
* Crude oil prices were up more than 1.5% by 1240 GMT, while spot was up 1.13% at $1,727.50 per ounce.