The German Dax opened cautiously on Thursday, with the benchmark index calculated at around 24,315 points, a 0.2 percent increase over the previous day’s close.
Despite reaching a new record high in trading earlier, the Dax index has been seen to fall back, according to Jochen Stanzl, chief market analyst at CMC Markets. Stanzl noted that the future contract on the Dax has not yet reached its all-time high of May 29 and that a new record high is necessary for the chart to look more promising.
The market has been in a sideways phase since the beginning of May, with a range of 1,000 points and a clear direction is lacking, leading to skepticism about the previous day’s new record high.
On Wall Street, the market declined on Wednesday, following the release of economic data that showed a weakening of the labor market and rising prices. This has created a situation in which the US Federal Reserve should theoretically lower interest rates to support the labor market, but is unable to do so due to rising inflation.
Regardless of the pressure from US President Trump on Federal Reserve Chairman Powell, the central bank must balance its dual mandate of maintaining a healthy labor market and low inflation, said Stanzl. He expressed the hope that the official labor market data on Friday will not confirm the recent trends, as a potential decline in the US market could lead to significant sales and, in turn, a decline in the Dax.
The European common currency, the euro, was slightly stronger on Thursday, with one euro exchanging for 1.1422 US dollars and one US dollar for 0.8755 euros.