World stock markets dropped as investors waited for the US job report on Friday, and the currencies struggled against the strength of the dollar, sending the Japanese yen to the lowest in six years.
According to CBS News, France’s CAC rose 0.1% to 4, 489.55 and the Britain FTSE 100 dropped 0.1% to 6,867.73. There was a 0.2% gain by Germany’s DAX to 9, 741.57. It was expected that US stocks would open lower, with the Dow Futures dropping 0.1% to 17, 055. S&P 500 futures fell 0.2% to 1, 994.20.
The strength in the dollar is attributed to the rate cut by ECB and the decision by the bank of Japan to hold steady the stimulus despite the second quarter’s GDP contraction. The dollar stood at 105.25 yen, rising from 105.38 in Thursday’s late trading to a high of 105.71 yen, the highest since Oct 2008. The euro neared a low of 14 months from $1.2937 to $1.2946.
Economists expect the job report to show the increase of 220,000 jobs by the US economy in August. The report is expected to influence the market expectations when the interest rates will be increased by the Federal Reserve.
The Seattle Times quotes Michael McCarthy, a Chief Strategist of CMC markets to have said, “Institutional investors remain sidelined ahead of tonight’s non-farm payrolls read. Broadly expected to confirm the US economic recovery, the market reaction is harder to predict.”
There were mixed regional benchmarks with the Nikkei 225 index of Japan ending at 15, 668.68, less than 0.1% lower. Kospi of South Korea dropped 0.3% to 2, 049.41 and the Hang Seng of Hong Kong dropped 0.2% to 25, 240.15. The Shanghai Composite Index in mainland China increased 0.9% to 2,326.43. The Australia S&P/ ASX 200 dropped 0.6% to 5,598.70.
There was a drop in the benchmarks in Singapore and Taiwan while there was a gain in those in New Zealand, Indonesia, Philippines and Thailand.
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