Global equity markets hovered within reach of record highs today, as investors reacted warmly to comments from Federal Reserve Chair Janet Yellen illustrating a better than anticipated outlook for the US economy. Market participants had anticipated a more hawkish view from Ms Yellen who stated that while significant improvements were being made to the labour market and the general economic health of the US economy was improving, policymakers would be in no rush to increase interest rates.
Coupled with solid progress regarding the Greek debt crisis, as well as the thawing of tensions between Russia and Ukraine, investors were cautiously taking profits today, with most major European benchmark indices headed for modest losses today. At the time of writing, US equity indices were trading cautiously lower as investors positioned themselves ahead of tomorrow’s release of key macroeconomic data, notably inflation data, durable goods orders and initial weekly jobless claims.
The dollar index pulled back towards 94.00 against a basket of its major peers early on today before recovering most of the day’s losses back towards 94.350, as investors breathed a collective sigh of relief. The greenback has traded in a broad sideways pattern since the start of the month, finding firm support at 94.00 in recent weeks with particular gains against the euro.