Two-day rebound in global shares slows

Wednesday, 22 October 2014 00:00 - - {{hitsCtrl.values.hits}}

LONDON (Reuters): A two-day rebound in global shares slowed and the dollar edged lower on Tuesday, as slightly above forecast Chinese growth data failed to erase concerns that the world’s second-biggest economy is losing momentum. China’s economy grew 7.3% in July-September official data showed, slightly above the 7.2% forecast by analysts. However, the growth was the weakest for any quarter since the 2008/09 global financial crisis.

There had been a subdued reaction in Asia and European markets also started cautiously before gradually finding their feet. Europe’s main bourses were up by 0.2 to 0.6% as trading settled [.EU] though euro zone periphery debt markets were under pressure again as worries about debt levels continued to weigh. Activity was also mixed in the currency market. The Australian dollar, often seen as a liquid proxy of Chinese growth prospects given Australia’s large trade exposure, got a lift from Beijing’s data, while the US dollar remained on the back foot. The US currency has lost roughly 2% over the last 10 days on signs that global growth and inflation are faltering, fuelling doubts about whether the US Federal Reserve will be able to push ahead in the next year with its first post-financial crisis interest rate hike. “The main price action is that the dollar is continuing to correct lower,” said Lee Hardman, a currency strategist at Bank of Tokyo Mitsubishi in London. “That is largely the reflection of markets pushing back expectations of Fed tightening (interest rate hikes).”