Crude prices yesterday added to last week’s gains on bets on a slowdown in US oil production, while stocks on major markets drifted higher despite a surprisingly large fall in Chinese exports that heightened concern over demand for commodities.
Chinese exports fell 15 per cent year on year in March, confounding expectations for a 12 per cent rise, while imports shrank at their fastest rate since May 2009.
The euro slipped to a four-week low on a renewed focus on the monetary policy differential between the United States and other major economies, with the Federal Reserve on track to raise US interest rates for the first time in nearly a decade.
The Australian dollar slumped to a nearly six-year low versus the greenback, weighed by the Chinese data.
Wall Street opened higher boosted by technology and bank stocks with traders focusing on the start of the quarterly earnings season.
Corporate America’s reaction to a strengthening dollar and falling oil prices throughout the first quarter are the key elements of this reporting season.
The Dow Jones industrial average rose 33.34 points, or 0.18 per cent, to 18,090.99, the S&P 500 gained 3.42 points, or 0.16 per cent, to 2,105.48 and the Nasdaq Composite added 24.60 points, or 0.49 per cent, to 5,020.58.
A measure of equities in major markets rose 0.1 per cent and the FTSEurofirst 300 index of top European shares was up 0.1 per cent, holding on to last week’s 3.7 per cent jump.
Chinese shares hit seven-year highs on expectation of further stimulus measures after the surprisingly week import/export data.
The weak Chinese data also raised concern over a possible global slowdown and hurt exporters of natural resources. The Australian dollar fell nearly 1.5 per cent while the New Zealand dollar fell 1.4 per cent.
The euro was down 0.2 per cent at $1.0581, having fallen as low as $1.0519. The dollar index, which measures the greenback against a basket of currencies, rose 0.2 per cent. The dollar was flat against the yen.
San Francisco Fed President John Williams told Reuters that as the US job market improves, the risk of an unexpected setback derailing the recovery once the Fed raises rates is receding.
Crude oil prices rose despite the stronger greenback as traders bet a slowdown in US drilling would contribute to higher prices. Brent crude rose one per cent to $58.47 per barrel and US crude added 0.8 per cent to $52.06.
The stronger dollar and prospects of higher US rates helped push gold lower for the fourth session in five. It last traded at $1,199.85 an ounce, down 0.6 per cent.