Shares in Europe and the United States rose on Wednesday, September 6, however, Asian markets fell and gold neared a 1-year high on investor concern about tensions on the Korean peninsula and a major hurricane barreling towards Puerto Rico and Florida.
The U.S. dollar fell against a basket of major currencies .DXY= after weaker-than-expected manufacturing data and after Federal Reserve Vice-Chairman Stanley Fischer said he would resign in October. (Graphic: World FX rates in 2017 – tmsnrt.rs/2egbfVh)
“This means a sea change in the composition of the Fed, especially as it’s not clear if Fed Chair (Janet) Yellen is going to get renominated. The composition of the Fed is going to look entirely different than it did just a couple of years ago,” said Subadra Rajappa, head of U.S. rates strategy at Societe Generale in New York.
The Dow Jones Industrial Average .DJI rose 61.07 points, or 0.28 percent, to 21,814.38, the S&P 500 .SPX gained 3.63 points, or 0.15 percent, to 2,461.48 and the Nasdaq Composite .IXIC dropped 9.92 points, or 0.16 percent, to 6,365.65.
The greenback also hit its lowest against the Canadian dollar in more than two years after the Bank of Canada surprised many by raising rates.
The dollar fell as much as 1.9 percent against the loonie to C$1.2140 CAD=D4, its lowest since mid-June 2015.
The pan-European FTSEurofirst 300 index .FTEU3 rose 0.14 percent and MSCI’s gauge of stocks across the globe .MIWD00000PUS gained 0.14 percent.
A meeting on Thursday of European Central Bank policymakers is expected to yield clues as to when they will begin to scale back monetary stimulus.
“A lot will depend on how (ECB President Mario) Draghi addresses the euro,” said Commerzbank currency strategist Esther Reichelt, in Frankfurt. “The question is whether he’ll address it strongly enough for the market to react.”
Risk-averse investors were also still worried about North Korea’s nuclear weapons tests. As tensions remained high, Russian President Vladimir Putin said on Wednesday that resolving the crisis is impossible with sanctions and pressure alone.
In the Caribbean, dangerous Category 5 Hurricane Irma slammed across islands with pounding winds and raging surf en route to a possible landfall in Florida this weekend.
“I think it (North Korea) is still going to be a factor with a bit of nervousness out there. We also have another hurricane heading towards Florida,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida. “We’re already seeing water flying off the shelves at grocery stores.”
Given the geopolitical tensions and weaker dollar, gold rose. Spot gold XAU= added 0.1 percent to $1,340.01 an ounce. U.S. gold futures GCcv1 gained 0.07 percent to $1,345.40.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.36 percent lower, while Japan’s Nikkei .N225 lost 0.14 percent, Reuters reports.
