Last week, global financial markets continued to experience volatility as investors remained concerned about inflation and its potential impact on the economy.
In the United States, the Dow Jones Industrial Average fell by 1.8% while the S&P 500 dropped by 2.5%. The tech-heavy Nasdaq Composite suffered the largest decline, dropping by 4.9%.
These losses were partly due to rising inflation expectations, which could lead to higher interest rates and lower corporate profits. The Consumer Price Index (CPI), a measure of inflation, rose by 0.5% in February, its largest increase since June 2009. The CPI has now risen by 1.7% over the past year.
Meanwhile, the European Central Bank (ECB) held its interest rates steady last week, but raised its inflation forecast for this year to 1.5%, up from its previous forecast of 1%. This move was seen as a signal that the ECB is prepared to tolerate higher inflation in order to support economic recovery.
Overall, last week’s financial news highlighted the ongoing concerns about inflation and its impact on the global economy. Investors will be closely watching for any signs of rising inflation in the coming weeks and months, and adjusting their portfolios accordingly.
In the United States, the dollar index, which measures the performance of the dollar against a basket of other major currencies, rose by 0.6% last week, reflecting a strengthening of the US dollar amid concerns about inflation. The euro fell by 0.6% against the dollar, while the Japanese yen and Swiss franc also lost ground.
The British pound, on the other hand, saw some gains against the US dollar, rising by 0.2%, after the Bank of England (BOE) signaled that it may raise interest rates sooner than expected due to rising inflation. The Australian dollar also saw gains, rising by 0.5%, after the country’s employment report showed stronger-than-expected job growth in February.
In Europe, the euro was also affected by the ECB’s decision to keep interest rates steady, with the euro falling by 0.4% against the US dollar following the announcement. Meanwhile, the Swiss franc, which is often considered a safe haven currency, gained ground against the euro and the dollar as investors sought safer assets amid market volatility.