Rising oil prices mixed with fading growth prospects pressed on the US dollar, and led the currency to weaken against all of its major counterparts. In the fray, the commodity currencies picked up minor gains against the greenback though oil prices rose above $136/bbl. The low yielding Swiss franc soaked in the biggest gains against the greenback, while the Japanese yen rebounded from a three-month low to trade around 106.8. Against the European currencies, the dollar tumbled against the euro to 1.56, while the British pound inched higher to trade at 1.96 against the greenback.
Rising inflationary concerns paired with accelerating oil prices pressed on the stock markets, with expectations of a future rate hike limiting the appeal of stock investments. As a result, the DJIA fell 205.99 points to 12,083.77 points, with 27 of the 30 components declining. The broader S&P500 slipped 22.95 points to hold off at 1,335.49 points amid 551 stocks falling to a fresh 52 week low.
Falling stock prices paired with growth concerns heightened the appeal of US Treasuries, and push many investors to move into the safety of risk-free bonds. As a result, the benchmark 10-Year yield fell to 4.079 percent from 4.111 percent, while the 2-Year yield plunged to 2.818 percent from 2.925 percent.
Looking ahead, the retail sales release will be the major event risk for the US dollar with economists forecast consumption to bounce back into positive territory. That will be followed by the Import Price index which will set the tone for the PPI and CPI figures after it with forecasts for a sharp rise in prices for goods from abroad.
