Volatile markets sent the dollar tumbling and stocks climbing this week after a discouraging reading on US manufacturing. The latest ISM survey indicated that the manufacturing sector contracted for the fifth consecutive month in March, driving market focus to waning economic growth and fueling speculation over possible rate cuts by the Fed this year.
As the “canary in the coal mine” for the wider economy, the deteriorating activity in the manufacturing sector sent the US dollar down, boosting the euro and sterling by more than 1%. Gold, too, has benefited from the Fed’s projected rate cuts, propelling it to surpass the $1980/ounce region.
Moving onto stock markets, the S&P 500 was able to close to the upside even in the face of a sharp drop on Tesla’s (NASDAQ:TSLA) latest quarterly delivery report. Positive sentiment has been buoyed by the Fed’s recent moves to expand its balance sheet and the energy segment’s strong rally following OPEC’s decision to cut oil output.
Meanwhile, down under the Reserve Bank of Australia left interest rates unchanged at its latest meeting and indicated that it could remain on the sidelines for an indefinite period of time. This announcement weighed on the Australian dollar but erased only half of the currency’s previous day rally.
Looking ahead, the Reserve Bank of New Zealand is slated to announce its rate decision on Wednesday. While markets point to a 25bps hike being fully priced in, expectations of lingering ratcheting up activity have pushed the kiwi dollar higher.
Tesla is an American electric vehicle and clean energy company founded by Elon Musk. Tesla serves as an industry darling in the new energy space, producing widely popular electric cars and leading the way in the research and development of new technology such as self-driving vehicles and clean energy products.
Elon Musk is an entrepreneur and engineer best known for founding Tesla and SpaceX. As a pioneering force in the development of renewable energy, Musk is perhaps most widely known as a philanthropist, having donated millions of dollars to humanitarian projects, education and research throughout the course of his career.