Global shares were on pace to make gains for the fifth straight week on Friday, which would be good for their best run in over two years. This week’s strong performance was bolstered by the weakening of the USD, central bank’s optimism towards the future, and oil prices surging to a new yearly high.
Shares in the United States were predicted to see gains for the third straight day upon the market opening, as the USD stabilized following three weeks of losses that brought it to its lowest against other main alternatives since October.
The dollar had seen losses following the U.S. Federal Reserve curtailing its plans for future interest rate increases, and chief economist at the European Central Bank, Peter Praet, signaled that the central bank could make its monetary policy even less restrictive. Markus Dahlström, head of FX spot and NDF markets at SEB, shared his views on the currency market and how it has been affected by central bank activity, “Post the FOMC (Fed) meeting we have seen mostly dollar sellers. People are squaring euro/dollar shorts and moving into longs…What we are wary about now is central bank comments as the ECB is not going to want to see the euro appreciate too much, and we have seen that this morning.”
Additional optimism was found in the form of rising oil prices, which climbed to new yearly highs. Many are hopeful that interest rates being held firm at their lower levels will lead to an increase in demand for oil, and then next month major oil producing countries will agree to halt their production
Looking towards emerging markets, restrained international interest rates and rising oil and commodity prices have combined to aide many emerging markets’ recovery from their abysmal start to the year.
Chinese shares were boosted by statistics that displayed the prices of homes in China climbed at their fastest rate in nearly two years last month. This information helped major share indices throughout mainland China see gains on the week, as the Hang Seng in Hong Kong rose 3.6% and the Shanghai Composite Index rose roughly 6%.