Both European and U.S. stocks rose today, following a more-positive-than-expected revision of second quarter gross domestic product (GDP) growth. Asian currencies, such as the Indian rupee and the South Korean won, and indices tracking East Asian markets also came up. “We’re back to focusing on economic data, specifically out of the U.S. and Europe, and the Fed tapering, as the market is coming around to believe the Syrian conflict poses only a short-term risk,” said Manish Singh, head of investment at Crossbridge Capital in London.
Dollar Rises with Positive U.S. News (Reuters)
The U.S. dollar hit a two-week high against the euro and a three-week high against the Japanese yen. Investors responded positively to revised second quarter GDP data, as well as rising U.S. Treasury yields and falling U.S. jobless claims. “This is a good report for those who expect the Fed to taper in September,” said Vassili Serebriakov, currency strategist at BNP Paribas in New York. “One of the key concerns that the Fed has voiced recently has been the dichotomy between firm employment and soft GDP growth. This should ease some of those concerns,” he said.
Oil Falls Back as Investors’ Syrian Fears Relax (Yahoo!)
Oil prices fell as crude oil stockpiles countered expectations by rising by three million barrels for the week ending Aug. 23. Also, a stronger dollar rendered oil priced in dollars more expensive and less attractive. Thursday’s market strongly corrected from Wednesday’s overreaction to prospective U.S. and European involvement in Syria. “Were the West to launch only a limited military strike against the Syrian regime, it is likely that oil prices would then fall again just as quickly again as they increased,” Commerzbank of Frankfurt said.