LONDON (Reuters) – Global shares fell on Wednesday as the dollar posted its biggest weekly gain since February and traded at a six-week high as it awaited progress in talks to raise exchange limits. indicates risk. American debt.
* The Democratic president, Joe Biden, and the chief Republican congressman, Kevin McCarthy, met on the eve of trying to avoid a possible default on the loan.
* MSCI’s global stock index was down 0.1%, while Europe’s STOXX 600 <.STOXX> fell 0.1% and US stock index futures rose 0.3%.
* The dollar has gained 2% against a basket of major currencies in the past month as investors braced for a slowdown in the US economy.
* “The risk-off period by global investors could start to weigh more on high-beta currencies, such as commodities and currencies linked to emerging markets, at least until a deal is struck,” Lee said. Hardman, MUFG strategist.
* High beta currencies – which tend to be more volatile – such as the British pound have risen strongly throughout the year, as well as emerging market currencies such as the Mexican peso and the Brazilian real.
* The dollar index, hovering near its highest level since early April, has gained more than 1.5% over the past week, its biggest weekly gain since late February.
* Latest economic data indicates a slowdown in the US economy after the Federal Reserve raised interest rates to tackle high inflation. The market expects the Fed to cut rates later in the year, according to CME’s FedWatch tool, but some policymakers have maintained their aggressive rhetoric.
* Meanwhile, data released on Wednesday showed the Japanese economy emerged from recession and grew faster than expected in the first quarter. The Nikkei crossed the 30,000 mark for the first time in more than 18 months. The index is up 15% this year thanks to foreign investment, including from billionaire Warren Buffett.