Stocks and bonds rally while dollar dips as Summers steps aside

The US dollar slid while bonds and shares rallied after the withdrawal of Lawrence Summers from the race to head the Federal Reserve.

Summers’ surprise decision came just before the central bank meets on Tuesday and Wednesday to decide when and by how much to scale back its asset purchases from the current pace of $85bn a month.

The new candidate appears to be Janet Yellen, Fed vice-chair since 2010.

Economists and analysts believe Yellen is more likely than Summers to maintain a robust stimulus programme.

As Reuters reports, the euro was up more than half a US cent at $1.3370, after hitting its highest in almost three weeks. The dollar also dropped against sterling and the Swiss franc.

It proved more resilient against the yen, which was weighed by its status as a safe-haven, and pared early losses to stand at 98.72. Liquidity was lacking with Japanese markets closed for a holiday on Monday.

Stock futures for the S&P 500 and Dow Jones industrial average climbed over 1 percent to 1,698.30 and 15,376.06 respectively, Reuters also said.




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