June 23, 2023: Currencies, Indices, and Stocks’ Market Summary.

The dollar rose as risk appetite diminished.

On Friday, June 23, the dollar received support from a wave of risk aversion as statements supporting monetary tightening from global central banks, including the US Federal Reserve, raised concerns about a larger economic contraction.

  • GBP/USD: The pound sterling retreated in recent trading by 0.07% to $1.2740 after briefly jumping following the interest rate hike to its highest level in almost a year. After three consecutive gains, the pound is heading for a weekly loss of more than 0.5%.

The British pound struggled to maintain its gains following the decision by the Bank of England yesterday to raise the interest rate by 50 basis points, exceeding expectations, to tackle ongoing inflation, while traders in Britain are concerned about a recession. High-interest rates typically support currencies, but the risk of economic contraction has prompted some investors to seek safe-haven assets like the dollar.

  • USD/JPY:  The dollar broadly strengthened and remained near its highest level over seven months against the yen, reaching 143.90. The yen faced new pressures as the Bank of Japan maintained its accommodative monetary policy.
  • EUR/USD: The euro declined by 0.04% to $1.0950.
  • DXY: The US dollar index rose 0.05% against a basket of six major currencies to 102.44.

Jerome Powell, the Chair of the US Federal Reserve, stated yesterday that the central bank will raise interest rates again but at a “cautious pace.”

US indices and stocks performance wrap:

US indices closed with mixed results on Thursday, with technology stocks shining on one hand and “Jerome Powell” confirming his commitment to a tightening policy on the other.

The Federal Reserve Chairman reiterated his view in his testimony before the Senate, favoring further interest rate increases in the coming months.

At the next monetary policy meeting in July, financial markets priced in a 76.9% probability of a 25 basis point interest rate hike.

  • US30: The Dow Jones index saw a slight decline of about 0.01%, equivalent to around 5 points, marking its fourth consecutive daily decrease.
  • US500:  The S&P 500 index rose by approximately 0.4% after three consecutive sessions of decline.
  • USTEC: The Nasdaq Composite index also increased by 0.95%, supported by new record highs for Amazon and Apple shares.
  • Amazon stock: Amazon stock jumped more than 4%, marking its highest daily gain in about two months and its highest closing ever.

The company added about $55 billion to its market value in one day, reaching around $822 billion, thereby increasing Jeff Bezos’ wealth by approximately $5.3 billion, considering his 9.65% ownership of the company, according to Refinitiv data.

These gains come despite the US Federal Trade Commission filing a lawsuit against Amazon, alleging that the e-commerce giant enrolled millions of Prime subscribers without their consent.

  • Boeing stock: Boeing stock declined by over 3%, falling for the third consecutive session, erasing all its June gains.

These losses came after aircraft parts supplier Spirit AeroSystems announced the suspension of production at its Kansas facility following workers declaring a strike on June 24th.

The Japanese Nikkei index recorded its first weekly loss in 11 weeks.

The Nikkei index gave up early gains achieved at the beginning of the session on Friday, June 23, to close lower and mark its first weekly loss after ten weeks of increases. This came as investors took profits ahead of an expected selling wave by the end of the month to rebalance investment portfolios.

The Nikkei declined by 1.45% to 32781.54 after rising as much as 0.8% earlier in the session. This resulted in a 2.7% decline for the week, marking its first weekly decline in 11 weeks.

The broader Topix index also fell by 1.38% to 2264.73 at the close.
Shares of Fast Retailing, the owner of the Uniqlo brand, dropped by 2.38% and exerted the greatest pressure on the Nikkei.

Disclaimer: This article is not investment advice or an investment recommendation and should not be considered as such. The information above is not an invitation to trade and it does not guarantee or predict future performance. The investor is solely responsible for the risk of their decisions. The analysis and commentary presented do not include any consideration of your personal investment objectives, financial circumstances, or needs.

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