Friday 29 April 2016 6:33 am
US shares finish lower as economy looks less solid after weak GDP figures
Suddenly, things might not be looking so rosy for the US economy. Markets fell last night after GDP growth for the first quarter came in at a miserly 0.5 per cent – down from 1.4 per cent in the final three months of 2015, and well off expectations.
Some poor earnings figures from its tech giants – Facebook excluded – caused Carl Icahn to dump his entire stock in Apple and the stock markets stutter.
At close of play on Thursday night, the Dow Jones was down 1.2 per cent on the day and back below the symbolic 18,000 marker. The S&P 500 was also down – 0.9 per cent. Both are still up over the month of April, though it hasn't been the roaring performance that it might have been.
Read more: UK GDP growth slows
In such a climate, the dollar, too has been coming under pressure. Much has been made of both the surging yen and the renaissance of sterling. The first was pinned on some surprise moves from the Bank of Japan (BoJ). While the pound was up because Brexit fears had subsided somewhat following the intervention of the US President, Barack Obama.
Less attention has been paid, however, to the fact that both currencies could be on the rise because of recent weakness in the dollar rather than anything else. Bloomberg reports this morning that the Bloomberg Dollar Spot Index – an exchange rate of the dollar against a basket of currencies – had fallen to an 11-month low.
A weaker dollar has caused investors to flee the greenback. Brent Crude reached $48 a barrel on early Friday morning – up nearly 10 per cent on the week.