The DAX opened essentially unchanged on Wednesday morning. At around 9:30 local time the benchmark index was calculated at 24,915 points, up 0.1 percent from the previous close. Thomas Altmann of QC Partners commented that “the world is losing confidence in the dollar”. He pointed out that, relative to the euro, the dollar sits at a four‑and‑a‑half‑year low, and relative to the Swiss franc it is at a 15‑year low.
Confidence in U.S. policy has been severely shaken, yet the dollar still enjoys the status of global reserve currency. If this loss of trust continues, that status could be threatened, leading to a more fragmented international currency landscape where no single currency will step into the dollar’s role.
In such an uncertain period, precious metals continue to be sought as safe havens. Technically, gold is now as heavily oversold as it was at the height of the 2020 rally, when a correction of almost 20 percent followed.
It’s a “Fed day” – the third‑to‑last rate decision, with Fed Chair Jerome Powell headlining. Donald Trump will likely look back at the remaining three rate meetings as he contemplates his next steps. In addition to monetary policy, the press conference is expected to address the criminal investigations into Powell. No change in the policy rate is anticipated today, and Powell’s ability to shape the Fed’s medium‑term course is now limited. Consequently, the meeting is unlikely to produce significant market movements.
Afterhours reporting on Microsoft and Tesla begins today, raising the question of whether the recent rally in tech stocks is underpinned by earnings growth, according to Altmann.
The euro weakened in the morning: one euro was trading at 1.2001 USD, meaning one dollar could be bought for about 0.8333 EUR.
Gold prices rose sharply; a fine ounce fetched 5,298 USD-up 2.3 percent-equating to roughly 141.93 EUR per gram. Brine (North Sea Brent) oil slipped marginally, trading at 67.56 USD per barrel, down the same 0.0 percent as on the previous day’s close.