Markets Slide After Rate Cuts/Dollar Gains
Global equities were falling sharply on Thursday after the ECB reduced borrowing costs by 50 basis points and BoE shocked markets with a massive 150 basis point reduction. Both moves came one week after the Fed's 60 basis point cut last Wednesday.
"Stocks usually get a short-term boost from rate cuts, but the time for that has long passed," said Matthew Carniol, chief currency strategist at TheLFB-forex.com." The S&P is down 2.8% since last Wednesday's 50 basis point cut by the Fed and European markets are taking steep losses today."
In recent equity trading, the German Dax and U.K. FTSE were down 6.84% and 5.70% respectively while the DJ Stoxx 600 was losing 5.55%. In the U.S., the DOW was moving 4.05% lower while the S&P 500 was off 4.28% and the NASDAQ 3.7%.
The dollar was gaining as risk was further unwound, moving 1.66% ahead of the euro, 0.84% up on the pound, 0.98% better than Australia's dollar and 0.08% higher against the yen.
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