Dollar stabilizes after selloff; focus on North Korea, Hurricane Irma

Dollar stabilizes after selloff; focus on North Korea, Hurricane Irma”

Tensions between the United States and North Korea have been on investors' minds recently, and on Monday global markets advanced as the situation did not get any worse.

All 11 major S&P 500 sectors rose on Monday, led by financial stocks, with insurers advancing as Irma, once ranked as one of the most powerful hurricanes recorded in the Atlantic, lost power.

Shares of USA and European insurers rose, with companies particularly exposed to Florida posting sharp gains as the losses from Irma were seen as less severe than feared.

The Dow Jones Industrial Average rose 215.95 points, or 0.99 percent, to 22,013.74, the S&P 500 gained 20.28 points, or 0.82 percent, to 2,481.71 and the Nasdaq Composite added 55.65 points, or 0.87 percent, to 6,415.84.

"Although [Hurricane] Irma is still causing some problems, the impact is far less than the worst-case scenario predictions, with insurance companies topping the performance tables today as the direct financial cost of Irma is likely to be far less than feared", said O'Keefe.

Markets were also buoyed by the lack of any new nuclear test by North Korea over the weekend. "With North Korea seemingly holding back on its ICBM test for now, there is a small degree of risk relief in the market, resulting in the paring of long positions in safe havens", Mizuho Bank said in a note.

The kiwi traded at 89.97 Australian cents from 90.11 cents in NY and fell to 78.56 yen from 78.68 yen. American International Group Inc.(AIG) rose 1.2%.

Trader Edward Curran works on the floor of the New York Stock Exchange Monday Sept. 11 2017. Insurers and travel companies are rising sharply in early trading on Wall Street after Hurricane Irma didn't turn out to be as destructive as many had feared

In the week ahead, FX traders will be watching the release of data which will include tomorrow's release of August CPI figures for the United Kingdom; analysts are calling for a rise to 2.8% (year-over-year). The euro was down 0.2 percent at $1.2015, after it rose as high as $1.2092 on Friday, its loftiest since January 2015.Despite the strength of the common currency and prospects for further gains on expectations of a turn in monetary policy, the European Central Bank has signaled it is gearing up to taper its massive stimulus program.

The Hang Seng index rose 1.04 per cent, to 27,955.13, while the China Enterprises Index gained 0.6 per cent, to 11,221.13 points.

"The big news this morning has been that Hurricane Irma, while devastating, has not been as catastrophic as had been feared", said Colin Cieszynski, chief market strategist at CMC Markets.

Oil is up 0.6% at $47.78/bbl, gold is 0.8% lower at $1340/ounce and the 10-year Treasury yield is up 4 bps to 2.1%.

Losses were capped by weekend talks between Saudi Arabia's energy minister and counterparts over a possible extension to a pact to cut global oil supplies beyond next March.

Benchmark U.S. crude rose 59 cents, or 1.2 percent, to $48.07 a barrel in NY while Brent crude, used to price worldwide oils, added 6 cents to $53.84 a barrel in London.

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