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London - London - The dollar dropped against all major currencies on Thursday, heading for its worst year in more than a decade, as Treasury yields stabilized after on Wednesday’s slide. Stocks in Europe failed to capitalize after a positive session in Asia.
The Stocks Europe 600 Index edged lower, with technology shares extending a decline while miners gained a second day. The MSCI Asia Pacific Index, a measure of Asian stocks, headed for a record high in thin trading ahead of New Year holidays.
The euro climbed to the highest in more than three months, while core bond yields in Europe ticked higher. The Bloomberg Commodity Index extended its longest rising streak in more than 12 years as oil, gold and copper posted gains.
While the Federal Reserve’s three interest-rate hikes might have argued for higher US yields and a stronger greenback, instead the Fed’s low cap on its long-term estimated policy rate, alongside muted inflation, have proved the stronger dynamics.
A softer dollar has been a boon for emerging markets, from Asia to Eastern Europe to South America. Meanwhile, bitcoin retreated again Thursday, extending a sell-off that began last week, as South Korean regulators stepped up scrutiny of their citizens’ dealings with cryptocurrencies.
Among the key events remaining for investors this week:
US trade figures are due on Thursday. Egypt decides on interest rates.
And here are the main moves in markets:
Stocks
The Stoxx Europe 600 Index declined 0.1% as of 8:32am London time. The U.K.’s FTSE 100 Index increased less than 0.05% to the highest on record. Germany’s DAX Index decreased 0.2% to the lowest in more than three weeks. Futures on the S&P 500 Index rose 0.1%.
Currencies
The Bloomberg Dollar Spot Index sank 0.4 percent to the lowest in more than three weeks on the largest decrease in more than two weeks. The euro jumped 0.4% to $1.1941, the strongest in almost 14 weeks on the biggest increase in more than a week.
The British pound climbed 0.4% to $1.3451, the strongest in three weeks on the largest climb in more than a week. The Japanese yen jumped 0.5% to 112.78 per dollar, the strongest in more than a week on the biggest increase in more than two weeks.
Bonds
The yield on 10-year Treasuries rose two basis points to 2.43% after sliding six basis points on Wednesday Germany’s 10-year yield rose two basis points to 0.41%, the largest rise in more than a week. Britain’s 10-year yield rose one basis point to 1.185%, the biggest rise in more than a week.
Commodities
West Texas Intermediate crude gained 0.3% to $59.82 a barrel. Gold gained 0.4% to $1,292.27 an ounce, hitting the highest in a month with its seventh consecutive advance. Copper rose 0.8% to $3.31 a pound, reaching the highest in more than four years on its 16th consecutive advance.
