Dollar strongest since 2003; bond selloff resumes

Fri Nov 18, 2016 12:38pm EST
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By Rodrigo Campos

NEW YORK (Reuters) - The U.S. dollar climbed on Friday to its highest level since 2003 on continued bets on faster inflation and higher interest rates, while Treasuries resumed a selloff that left benchmark yields on track to post their steepest two-week increase in 13 years.

A growing perception that the economic policies of U.S. President-elect Donald Trump will lift consumer prices pushed the dollar higher, weighing on crude and other commodities.

On Wall Street, the tech- and biotech-heavy Nasdaq Composite hit a record intraday high before slipping lower. The Dow industrials and S&P 500 were also near record highs despite the day's decline.

"I think given the major indexes are at or near all-time highs, we're probably due for a little bit of a digestion period," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management.

"Equities are generally expected to move sideways until we get a little more of visibility into what some of the policies are going to be with the new administration."

The Dow Jones industrial average .DJI fell 39.48 points, or 0.21 percent, to 18,864.34, the S&P 500 .SPX lost 5.55 points, or 0.25 percent, to 2,181.57 while the Nasdaq Composite .IXIC dropped 14.15 points, or 0.27 percent, to 5,320.83.

The pan-European FTSEurofirst 300 index .FTEU3 fell 0.54 percent, while MSCI's gauge of stocks across the globe .MIWD00000PUS fell 0.49 percent.

Emerging market stocks fell 0.2 percent and remained near a four-month low hit Monday.   Continued...

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, NY, U.S. November 18, 2016. REUTERS/Brendan McDermid