Fed Governor Lael Brainard had said last Monday that low interest rate policies across advanced economies could make the United States more vulnerable to spikes in the value of the dollar, which could put downward pressure on inflation. Banks are making some of the biggest gains as investors wait for the Federal Reserve to meet this week.
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Overnight, gold prices held on to overnight gains during North America’s session on Monday, as the US dollar slipped amid expectations of no rate change from the Federal Reserve this week. The Dow rose as much as 131 points early on, then fell as much as 30 points in the afternoon.
Wells Fargo rose 1.3 percent following an upgrade from Robert W. Baird. After opening in Asia just under the key $1.3000 level, the pound edged higher during the session to reach $1.3046.
“The market is resigned to believe that (the Fed is) not going to raise rates this week”, said Thierry Albert Wizman, global interest rates and currencies strategist at Macquarie Ltd in NY.
Additionally, a lack of concrete promises about the Bank of Japan’s plans has also been cause for worry.
Shanghai, which was also closed Thursday and Friday, ended up 0.8 percent while Seoul gained 0.8 percent and Singapore added 0.3 percent.
Germany’s Bundesbank chief on Monday said that the European Central Bank must not allow low interest rates and monetary stimulus to last indefinitely. JPMorgan Chase rose 46 cents to $66.28 and Bank of America rose 14 cents to $15.64.
US electrical components distributor Avnet was up 12.2 percent at $44 after it announced the sale of its IT business to tech products distributor Tech Data Corp for about $2.6 billion.
POWERED DOWN: Despite those moves, technology companies gave up an early gain and lagged the market.
Apple, which surged last week and reached its highest price this year, lost 1.34 U.S. dollars, or 1.2%, to 113.58 USA dolllars and Intel fell 51 cents, or 1.4%.
USA crude prices were up 1.6 per cent to US$43.71 a barrel, while Brent added 1.3 per cent to US$46.34. Brent crude, used to price global oils, slipped 10 cents to $45.85 a barrel in London. Halliburton climbed 63 cents, or 1.5 per cent, to $41.67 and Schlumberger added 88 cents, or 1.2 per cent, to $77.21. The index lost 1.3 percent last week, partly due to some Fed officials striking a dovish stance on rates.
STEP ON THE GAS: General Motors gained 95 cents, or 3.1 percent, to $31.92 after an analyst said auto sales, which are at record highs, should remain strong for several years. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes.
The S&P energy index was up 0.3 percent, while the rate-sensitive S&P financial index was up 0.7 percent.
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Japan’s Nikkei stock index shed 0.5 per cent, as trading resumed after a public holiday on Monday.
