Fed’s Powell dumps American dollar, as U.S. share jumps

The British pound slipped to $1.2628 from $1.2630. A parliamentary debate on May's deal with Brussels kicks off next week, with a vote scheduled for the week of January 14.

And Federal Reserve Chairman Jerome Powell said the Fed will be flexible in its plan to hike interest rates.

The data come amid debate on whether the US Federal Reserve has been too aggressive in hiking interest rates and should back off in 2019. For the week, the loonie was up 1.8 percent, its biggest advance since September. He acknowledged that recent economic reports out of China were mixed, but noted that the Chinese authorities are responding with additional stimulus.

Earlier, Japan's Nikkei had slumped 2.3 percent, due in part due to a strengthening yen, which advanced further on the United States currency following Powell's dovish commentary.

The dollar strengthened. It rose to 108.51 yen from 107.77 yen.

The Dow soared 747 points, or 3.3% - its fourth-biggest point increase of all time. South Korea's Kospi added 0.8 per cent. Japan's Nikkei 225 index fell 2.3 per cent on its first day of trading in 2019 as technology and electronics makers slumped on Apple's report that Chinese iPhone sales were slipping.

European shares also overcome losses from a day earlier, with Germany's DAX gaining 3.4 per cent and France's CAC 40 rising 2.7 per cent. Britain's FTSE 100 advanced 2.2 per cent.

The Dow Jones Industrial Average on Friday jumped to a fresh peak as a trio of bankers, headlined by current Chairman Jerome Powell, underscored the health of the USA economy but also expressed an attentiveness to a market that has grown fragile amid a spate of interest-rate increases.

The Dow Jones Industrial Average .DJI rose 746.94 points, or 3.29 percent, to 23,433.16, the S&P 500 .SPX gained 84.05 points, or 3.43 percent, to 2,531.94 and the Nasdaq Composite .IXIC added 275.35 points, or 4.26 percent, to 6,738.86.

Speaking after months of volatility in world financial markets, and just hours after a monthly jobs report suggested the US economy remained robust, Powell's soothing comments initially pushed stock indexes higher.

The spread between two- and 10-year yields is the conventional measure of the yield curve, the inversion of which is a strong indicator of recession. Spot gold prices, which reached a six-month peak on Thursday, dropped 0.7 percent.

USA gold futures settled down 0.7 percent at $1,285.80 per ounce, having briefly surpassed the psychological $1,300 per ounce level earlier in the session. The stock market has seen stomach-churning declines since October, a development that Trump has blamed on the Fed's continued rate hikes, although the president's trade dispute with China as well as concerns about global economic growth also played a part in the market volatility.

Brent crude futures rose $1.11, a 1.98 percent gain, to settle at $57.06 a barrel. Brent crude, used to price global oils, was up 2 per cent to $57.06 per barrel in London.


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