Financial market
trading revolved around the U.S. dollar on Wednesday with European
shares rallying on the back of a weak euro and U.S. shares and
commodities struggling.
The
dollar soared to a fresh eight-year high against the yen after having
fallen back earlier on Wednesday following its biggest rally in two
years the day before. But its renewed strength against the Japanese
currency sent ripples across other asset classes.
At midsession in Europe, the dollar was up 0.5 percent against the yen at 123.68 yen JPY=, its highest since June 2007.
This pushed the euro back well below $1.09, meaning the single currency was unchanged on the day having been up as much as 0.4 percent earlier.
On Tuesday, the dollar index, a measure of the greenback's value against a basket of six currencies, rose 1.3 percent, its biggest rise since July 2013.
"Dollar/yen is the cleanest
way to track dollar bullishness, and this is currently proving to be the
case. The fact that bets against the yen have been so much less crowded
than bets against the euro recently also helps," Morgan Stanley
currency analysts said in a note on Wednesday.
There were no major U.S. or European economic data due on Wednesday, leaving traders to ruminate on the timing of the first U.S. interest rate hike and the latest twists in the Greek debt talks saga.
Greece and its European creditors have played down fears that Athens would default on a payment to the International Monetary Fund next week.
Greece could avoid the June 5 payment without defaulting if it lumps together all IMF repayments due in June and pays them at the end of the month.
But U.S. Treasury Secretary Jack Lew warned that a miscalculation could lead to a new crisis, and that it would be a mistake to think this would have no consequence for the wider world.
The FTSEuroFirst 300 leading index of 300 top European shares was up half of one percent at 1610 points .FTEU3 and Britain's FTSE .FTSE rose 0.6 percent to 6,988 points.
France's CAC .FCHI was up 0.5 percent at 5,108 points and Germany's DAX .GDAXI was up 0.1 percent at 11,639 points.
Asian shares took their cue from Wall Street's weakness on Tuesday, and the MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS retreated by 0.8 percent. But Tokyo's Nikkei .N225, supported by the yen's fall, bucked the trend and rose 0.2 percent.
U.S. futures pointed to a broadly flat open on Wall Street after Tuesday's 1 percent slide, its biggest fall in three weeks.
At midsession in Europe, the dollar was up 0.5 percent against the yen at 123.68 yen JPY=, its highest since June 2007.
This pushed the euro back well below $1.09, meaning the single currency was unchanged on the day having been up as much as 0.4 percent earlier.
On Tuesday, the dollar index, a measure of the greenback's value against a basket of six currencies, rose 1.3 percent, its biggest rise since July 2013.
There were no major U.S. or European economic data due on Wednesday, leaving traders to ruminate on the timing of the first U.S. interest rate hike and the latest twists in the Greek debt talks saga.
Greece and its European creditors have played down fears that Athens would default on a payment to the International Monetary Fund next week.
Greece could avoid the June 5 payment without defaulting if it lumps together all IMF repayments due in June and pays them at the end of the month.
But U.S. Treasury Secretary Jack Lew warned that a miscalculation could lead to a new crisis, and that it would be a mistake to think this would have no consequence for the wider world.
The FTSEuroFirst 300 leading index of 300 top European shares was up half of one percent at 1610 points .FTEU3 and Britain's FTSE .FTSE rose 0.6 percent to 6,988 points.
France's CAC .FCHI was up 0.5 percent at 5,108 points and Germany's DAX .GDAXI was up 0.1 percent at 11,639 points.
Asian shares took their cue from Wall Street's weakness on Tuesday, and the MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS retreated by 0.8 percent. But Tokyo's Nikkei .N225, supported by the yen's fall, bucked the trend and rose 0.2 percent.
U.S. futures pointed to a broadly flat open on Wall Street after Tuesday's 1 percent slide, its biggest fall in three weeks.
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