The U.S. dollar index touched a near 14-year high on Wednesday, while oil prices fell in a volatile session as traders were caught between a build in U.S. stockpiles and the chance of an agreement on an output cut.
Declines in bank stocks more than offset gains in the technology sector on Wall Street. The S&P 500 had ended on Tuesday at a 10-week high while the Dow industrials set a record close, fueled by a post-U.S. election rally.
“People with money on the sidelines are looking for a place to put it. They’re looking for names that haven’t rallied as much and ones that have rallied are taking a bit of a breather,”
-said Paul Hickey, co-founder at research firm Bespoke Investment Group in Harrison, New York.
The dollar rose 0.5pc against the yen to a five-month high of 109.75 yen, rose to an eight-year high against the Chinese yuan of 6.8703 yuan and the euro fell below $1.07 for the first time in a year.
The euro deteriorated to its weakest level in almost a year against the greenback. Trump’s stunning victory on Nov. 8 has raised concerns about a rising tide of potentially destabilizing wins for populist candidates and issues on ballots across Europe in the coming year.
“The market has gone a bit too far ahead of itself. It looks vulnerable for a short-term pullback,”
-said Mazen Issa, senior currency strategist at TD Securities in New York.