It was a great day for European shares on Thursday after news got out that the United States are going towards their first interest rate rise and will keep an upward pressure on bond yields and the dollar. The profits for the European shares are the best in over a month.
The New Zealand dollar, on the other hand, fell to a five year low. The main reason is the new policy of their Central Bank, to cut interest rates for the first time in four years. South Korean shares made a jump as they cut rates to a record low level.
China, the powerhouse, demanded that both happenings to be underlined.
There was a slow start of the regions benchmark FTSEurofirst 300, when it lost 0.5 percent, the news came that Greece is near to seal a deal with the creditors. After that, the Athens stock market went up for more than six percent.
The euro fell down compared to the dollar so that had an influence too. The U.S dollar is becoming more and more stable and is expected to stay strong, especially after retail sales data come out soon. Healthy jobless claims in the country could also bring new strength for the currency.
Tokyo’s Nikkei made a jump 1.4 percent, South Korean’s Kospi 0.3 percent and Australian shares 1.3 percent. The macro news from the region and the profits on Wall Street were the main reasons.
The rate cut in New Zealand hit the local dollar and took 2 percent of its value. It was a strange move for the economists, although it was previously announced by the traders, Michael Turner, a strategist at RBC Capital Markets, said that the New Zealand Bank proved to be more flexible than what most people think.
The dollar – yen ratio changed again but this time in the yen’s benefit, after Haruhiko Kuroda, the Governor of the Bank of Japan, made a statement that their currency is already very, very weak.