This week the US Dollar dropped and was facing its worst week in more than a month.
While treasury yields dropped after underlying US inflation data, released on Friday, offset higher petrol prices and strong retail sales in the wake of disruptions caused by recent hurricanes.
Stocks, however, reached their fourth record in a row, with Wall Street moving higher as some investors bet that the inflation data could curb future Federal Reserve’s rate rises.
European shares also took a high rise to their highest level in almost four months, which helped some well-received corporate earnings updates.
US petrol prices took the biggest increase in 8 months since September, which was caused by the recent hurricane disruptions at oil refineries in the Gulf Coast area, but underlying inflation remained muted.
The US retail sales recorded their biggest increase in two and a half years in September, due to reconstruction of the cities in areas devastated by Hurricane Harvey and Irma boosting demand for building materials and motor vehicles.
“It’s favourable environment for risk taking. Economic and earnings growth with slow inflation means rates must stay low and the dollar trends lower and risk-taking is rewarded,” said Jack Ablin, Chief Investment Officer at BMO Private Bank in Chicago.
Oil, Petrol and retail prices have taken a huge increase and will be facing more.
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