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Dollar towers above rivals after BoJ's surprise rate-cut

News Date: 29/1/2016 09:46:35
Update Date: 29/1/2016 09:47:58
The U.S. dollar recovered handsomely from a two-week low hit yesterday, surging 0.83% against a basket of rival currencies, after Bank of Japan stunned global markets with a surprise rate cut, bringing deposit rates into negative territory for the first in Japan's history, after a batch of earlier data showed worsening spending and inflation rates in the world's third largest economy.
The dollar's recovery is beset with uncertainties however, after late GDP data showed a sharp growth decline in the fourth quarter to 0.7% from 2.0% in the third quarter, while missing forecasts of 0.8%. Other data disappointed as well, with the goods trade balance deficit deepening to $61.5 billion in December from $60.3 billion in November.
Dollar nonetheless held its high ground for now, surging a massive 2.10% versus the collapsing yen to 121.27, while tackling the euro into submission with a 0.76% jump to 1.0856. The greenback also gained 0.70% on sterling to trade at 1.4265.
Oil prices rose on prospects of a deal between Russia and OPEC to cut global supply excess, while the unexpected easing from BoJ also helped with sentiment. Brent crude futures rose 70 cents, or 2.05% to $35.92 a barrel. U.S. crude futures gained 67 cents, or 2.0% to trade at $34.26 a barrel.
European shares rose comfortably, with the pan-European index FTSEurofirst 300 jumping more than one percent to 1,331. Germany's DAX added 85 points, or 0.88% to 9,719, while France's CAC 40 index climbed 1.10% to 4,374. Britain's FTSE was the biggest winning, gaining a solid 1.37% to trade at 6,011.

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