The signs were there for a stock market plunge, which is exactly what has happened today. Gold, a perceived safe-haven asset, had been rising strongly of late despite the dollar’s strength and the equity market rally. The Japanese yen, likewise another safe haven asset, has been firm and today it has got firmer.
The euro fell below $1.05 for the first time in six weeks on Wednesday, hit by a combination of concern over France's presidential election campaign and the growing gap between core euro zone interest rates and the U.S. equivalents.
Global stocks hit record highs on Wednesday, topping 2016's gains just two months into 2017, while the dollar rose before Federal Reserve minutes that will be scoured for clues about the next U.S. interest rate rise.
Monetary policy guidance and strong U.S. data failed to provide another push higher for the greenback last week. Fed Chair Janet Yellen made a blunt statement in her testimony before Congress that it would be unwise to wait too long to tighten monetary policy.
Falls for the euro and the pound dominated trade in the major global currencies on Friday, hit by a combination of nerves over upcoming French elections and signs British consumers are beginning to struggle in the face of the Brexit effect.
World stocks rose to a whisker off all-time highs on Wednesday and the dollar rose for the 11th straight day following Federal Reserve Chair Janet Yellen's flagging of a possible interest rate rise next month.
The dollar chalked up its 11th straight daily rise on Wednesday, as investors' focus moved to inflation data in the United States for more support for the idea of a rise in Federal Reserve interest rates next month.