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Dollar falls, shares flinch as Trump turfs out Tillerson

Reuters  |  LONDON 

By Ritvik Carvalho

LONDON (Reuters) - The dollar fell on Tuesday and share markets flinched as broke that U.S. had ousted yet another of his top team, this time Secretary of State

Trump said on he was replacing the former Tillerson with Mike Pompeo, the of the Central Intelligence Agency(CIA), and that would take over from Pompeo.

The announcement saw the dollar index, which measures the greenback against six other top world currencies, fall to a three-day low and meant the opened more subdued than traders had earlier expected.

"What we are seeing here is that those people in the in the more moderate line of thinking are being ousted, so this adds to the concerns the more radical forces are gaining some ground here," said Rabobank's of Macro Strategy Elwin de Groot.

The U.S. 10-year Treasury yield fell as much as 3 basis points on and was last trading at around 2.84 percent, also held down by of slowing

The index of stocks, which tracks shares in 47 countries was less than 0.1 percent higher by 1305 GMT, with European stocks a fraction lower having started modestly higher.

The world index has recovered about half its losses sustained during a shakeout in stocks in February. The selloff came on the back of strong U.S. wage numbers, which investors feared might feed into and push towards a faster pace of monetary tightening.

Raising its global growth forecasts, the (OECD) said the Fed would probably have to raise interest rates four times this year as picks up.

Fed funds futures however, show markets pricing in a total of three rate hikes this year.

"We had a index) which was in line with expectations, which helped the stock market - investors were gearing themselves up for a stronger than consensus figure," said

"Subsequently, that and Treasuries have reversed, that's on the fear that Tillerson's alleged removal will give the nationalists greater power within the over the globalists."

The pan-European 600 was last down 0.2 percent. Earlier in though, MSCI's broadest regional index excluding ended up 0.2 percent after spending much of the day struggling for direction.

In currencies, the dollar's dip on was mainly against the euro. The Japanese yen was still half a percent down and at a two-week low, pressured by a political scandal engulfing

Britain's pound rose to a one-week high. British minister said in a mid-term budget update that the would grow slightly more quickly than previously expected and lowered the government's expected borrowing.

"We did have confirmation that public finances are better than expected and that there will be scope for spending increases in future years," said Sarah Hewin, of research at

In commodities U.S. crude futures and Brent were both down half a percent each at 61.01 per barrel and 64.60 per barrel respectively.

Gold meanwhile bounced back into positive territory after and after the U.S. inflation data.

(Reporting by Ritvik Carvalho; additional reporting by in LONDON and markets team; Editing by Jon Boyle)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, March 13 2018. 19:15 IST
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