Global shares fall, dol­lar firms as US elec­tion looms

The Pak Banker - - Front Page -


World stocks fell and the dol­lar firmed on Mon­day as low-risk as­sets gained at the start of a week in which the United States elects a new pres­i­dent and Greece must nav­i­gate a fraught par­lia­men­tary vote to se­cure fresh res­cue funds.

Opin­ion polls show the race be­tween Pres­i­dent Barack Obama and Repub­li­can chal­lenger Mitt Rom­ney re­mains neck-and-neck at the start of the last day of cam­paign­ing, and the un­cer­tainty over the out­come left fi­nan­cial mar­kets jit­tery.

Safe-haven bids pushed the U.S. dol­lar to two-month highs against a bas­ket of ma­jor cur­ren­cies (.DXY) and Ger­man two-year gov­ern­ment bond yields dropped be­low zero for the first time in two months.

"You don't want to have too much risk ahead of the U.S. elec­tion to­mor­row, so I think ev­ery­one is go­ing to be very cau­tious un­til we see the first in­di­ca­tions of who will win," said To­bias Blat­tner, an econ­o­mist at Daiwa Se­cu­ri­ties. Euro­pean shares (.FTEU3) were down 0.7 per­cent at 1000 GMT hav­ing ended the pre­vi­ous week at a two-week high. World shares <.MIWD00000PUS> dropped 0.3 per­cent as falls in Asian eq­uity mar­kets fol­lowed Fri­day's late sell off on Wall Street.

The euro fell to a new two-month low against the dol­lar of $1.27925, ex­tend­ing re­cent losses ahead of a vote in Greece on Wed­nes­day on un­pop­u­lar cost cuts and tax hikes the EU, IMF and ECB 'Troika' want passed be­fore they of­fer more cru­cial aid.

"With the euro there is con­cern about what's go­ing on in Greece, that they might not might not get the aus­ter­ity vote through," said Arne Lohmann Ras­mussen, head of cur­rency re­search at Danske Bank in Copen­hagen. "With the dol­lar, the fis­cal cliff is re­ally get­ting some at­ten­tion be­fore the elec­tions," he said, adding that bet­ter-than-expected U.S. job data on Fri­day had also boosted de­mand.

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