Dollar Set for Biggest Monthly Gain Since May on Fed Prospects
The dollar is on course for its biggest monthly gain against major peers since May after reaching a seven-month high as speculation increased that U.S. interest rates will rise this year.
A gauge of the greenback has advanced 2 percent this month and the U.S. currency outperformed all its 10 developed-market counterparts as markets priced in the Federal Reserve’s rate increase in December. Gross domestic product data due on Friday and a nonfarm payrolls report next week will offer further clues on the state of the economy. The Fed’s next policy decision is on Nov. 2. The dollar retreated from the highest level since March on Tuesday after a report showed a measure of consumer confidence decreased to a three-month low in October.
The Bloomberg Dollar Spot Index, which measures the U.S. currency’s performance against a basket of 10 major counterparts, was little changed as of 9:11 a.m. in Tokyo from Tuesday when it slipped 0.1 percent after reaching the highest level since March 16.
The S&P 500 is sitting less than 2 percent off of its all-time high, much of it thanks to a few of the biggest companies in the index hitting new highs of their own. Only 14 stocks in the index touched new 52-week highs on Monday, but three of them are in the top five in terms of market cap, meaning they make up a larger portion of the index.
“Alphabet Inc., Microsoft Corp., and Facebook Inc., which rank as the second, third, and fifth largest publicly traded U.S. companies and represent more than $1.4 trillion market cap, all hit new 52-week highs yesterday,” Bespoke Investment Group observed. “While overall market breadth hasn’t been bad, the largest stocks in the S&P 500 have definitely been doing a lot of the heavy lifting.”
Apple Inc., Amazon.com Inc., and Facebook have added the most points—22—to the S&P 500 this year. The stocks account for 20percent of the index’s gains, according to data compiled by Bloomberg. Microsoft has added about 5 points and Google parent Alphabet approximately 2 points.
Oil prices drop as concerns over global fuel glut re-emerge
Oil prices fell more than one percent on Wednesday as a report showing a surge in U.S. crude stocks, rising production in Nigeria and squabbling among producers about a planned output cut re-ignited concerns about a global supply glut.
Brent crude futures LCOc1 were down 51 cents, or 1 percent, at $50.28 a barrel as of 0648 GMT. Prices hit $50.13 earlier in the session, the lowest since Oct. 3.
U.S. crude CLc1 was at $49.37 per barrel, down 59 cents, or 1.2 percent, from its settlement on Tuesday. It dropped to $49.21 earlier, the lowest since Oct. 10.
Reference: Reuters,Bloomberg
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