Markets around the world plummeted Friday as the U.S. dollar went into freefall
The American currency's near collapse followed several weeks of declines, which has seen the dollar lose 7% of its value against the euro, yen, and the pound,in the last month alone. The dollar index (weighted against a number of currencies) has fallen to its lowest level since October 1997. The relentless selling has failed to cause even the shallowest of corrections. Friday's announcement by the Trade Department of a 5.6% fall in the trade deficit for April, coming in at $62 billion against analysts expectations of $67 billion, failed to arrest the slide.
The dollar rout has unnerved global stock markets with major falls being recorded in Asia, Europe, and the Americas. London's FTSE 100 fell 129.90 or 2.15% to 5,912.10. The Paris-based CAC 40 at 5,150.45 was down 112.49 or 2.14%. The German DAX fell 138.44 or 2.29% to 5,916.28. The Amsterdam Exchanges index was off 11.79 or 2.53% at 455.09. In Sweden the OMX Stockholm 30 index fell 29.71 or 2.85% to 1,013.69. The Swiss SMI shed 143.17 or 1.77% to 7,954.10.
In Asia Japan's Nikkei 225 ended the day down 260.36 points or 1.54% at 16,601.78. The Hong Kong Hang Seng fell 238.93 or 1.39% at 16,901.85.
Middle East markets, where the week ends on Thursdays, suffered one of their worst weeks ever. Most Mideast currencies are pegged to the dollar which means the value of stock investments held by foreigners has been plummeting in line with the U.S. currency. The Dubai stock market shed 14.35% for the week, while the Abu Dhabi market gave up 10.49%. Market analysts fear the stock meltdown may feed into the propery sector which is overblown, particularly in Dubai. Emaar, the emirate's largest property developer lost 22.8%, more than a fifth of its value, over the week.
No comments:
Post a Comment