The dollar regained its footing yesterday after tanking overnight as US President Donald Trump tried to talk the strong greenback down.
Stock markets, meanwhile, churned lower with cautious investors unwinding positions in subdued trade before the long Easter holiday weekend.
European equity markets traded near lows after Wall Street came off to a weaker start in a mixed reaction to first-quarter results from heavyweight financials JPMorgan, Citigroup and Wells Fargo.
London’s FTSE 100 was 0.3% down at 7,327.59 points, Frankfurt’s DAX 30 was 0.4% down at 12,109.00 points and Paris’ CAC 40 dropped 0.6% at 5,071.10 points, while the EURO STOXX 50 fell 0.6% at 3,448.26 points, at close yesterday.
The European single currency fell back against the dollar, having briefly strengthened after Trump, having overnight tweeted his belief that “economic confidence is soaring”, told The Wall Street Journal he was worried about the greenback’s strength.
“I think our dollar is getting too strong, and partially that’s my fault because people have confidence in me.
But that’s hurting — that will hurt ultimately,” Trump, who has talked the dollar down several times since his election, told the paper.
The US unit also posted slight gains against the safe-haven Japanese yen after slumping overnight to a low last seen in November.
European markets London, Frankfurt and Paris will not reopen until Tuesday, while Wall Street will not trade today.
Geopolitical tensions meanwhile continued to weigh on investor sentiment, as ties between the US and Russia turn increasingly frosty over Moscow’s backing for Syrian President Bashar al-Assad.
But Trump’s praise for Chinese President Xi Jinping Wednesday raised hopes of easing friction between the two superpowers over dealing with North Korea’s nuclear programme.
And a surge in Chinese exports in March, the largest jump in two years, bolstered hopes that the world’s number two economy is getting back on track after a recent slowdown — it grew last year at its slowest pace in a quarter of a century.
Oil prices recovered after the International Energy Agency said that the world market is “very close to balance” as landmark Opec-led production cuts are mitigated by rising US supply and slipping worldwide demand growth.
But in its monthly report the IEA also said that oil stockpiles probably rose in the first quarter of the year, rattling investors who worry about an ongoing oil glut despite Opec’s efforts.
Gold continued to sparkle as investors shifted money into safe assets, rising 0.7% on the day and taking its rise over the past three months to nearly 7.5%.