European stock markets extended gains, gold hit a record high and the dollar fell on Friday ahead of an expected US interest-rate cut next week.
More data this week suggesting the Federal Reserve was winning the battle against inflation provided an extra kick for global equities after recent drops caused by worries of a possible US recession.
Asia’s main stock markets diverged as they closed out the week, while Wall Street advanced Thursday.
While concerns linger over last week’s big miss on US jobs creation, traders are turning their attention to the central bank decision next Wednesday.
“Gold prices are once again at record levels as the dollar weakens ahead of an anticipated interest-rate cut from the US Federal Reserve,” noted Russ Mould, investment director at AJ Bell.
“A weaker dollar is typically supportive to gold because it is denominated in the US currency.
“Lower rates are also a driver for the precious metal as it increases its attractiveness versus assets like cash and bonds.”
The price of gold struck an all-time high $2,572.98 per ounce on Friday.
Having slashed rates in the early months of the pandemic, the Fed began hiking them in 2022 as inflation started to take hold, and they kept lifting until rates hit a two-decade high.
Now, with disinflation seemingly kicking in and the labour market softening, decision-makers are tipped to start cutting again, with debate on whether it will be a 25 or 50-basis-point move.
The European Central Bank on Thursday further reduced eurozone borrowing costs as inflation cools, while eyes will be on the Bank of England next week to see if it will carry out back-to-back cuts.
In company news, Danish logistics group DSV on Friday announced a deal to acquire Schenker, a division of German rail firm Deutsche Bahn, for 14.3 billion euros ($15.8 billion) and create a “powerhouse” in the freight-forwarding sector.
– Key figures around 1100 GMT –
London – FTSE 100: UP 0.4 percent at 8,270.09 points
Paris – CAC 40: UP 0.3 percent at 7,457.00
Frankfurt – DAX: UP 0.5 percent at 18,617.85
Tokyo – Nikkei 225: DOWN 0.7 percent at 36,581.76 (close)
Hong Kong – Hang Seng Index: UP 0.8 percent at 17,369.09 (close)
Shanghai – Composite: DOWN 0.5 percent at 2,704.09 (close)
New York – Dow: UP 0.6 percent at 41,096.77 (close)
Euro/dollar: UP at $1.1090 from $1.1078 on Thursday
Pound/dollar: UP at $1.3129 from $1.3126
Dollar/yen: DOWN at 140.63 yen from 141.78 yen
Euro/pound: UP at 84.49 pence from 84.36 pence
Brent North Sea Crude: UP 0.9 percent at $72.64 per barrel
West Texas Intermediate: UP 1.0 percent at $69.64 per barrel
dan-bcp/lth
