LONDON Feb 24 Commodity-related sectors led
European shares lower for a third straight session on Friday
while the dollar was poised for a weekly losses as the
"Trumpflation trade" lost momentum.
World stocks have hit record highs, emerging markets have
come back in favour and the dollar has climbed to a 14-year peak
in recent weeks on the back of expectations that U.S. President
Donald Trump's economic agenda will stoke growth and inflation.
New U.S. Treasury Secretary Steven Mnuchin took the edge off
that optimism overnight when he said any policy steps by the
Trump administration would probably have only a limited impact
The comments, made in his first televised interviews since
taking office last week, suggested much work was still needed on
a sweeping tax reform plan that Mnuchin called his main
They knocked the dollar back and it was trading down 0.2
percent against a basket of other major currencies at 100.82
, leaving it slightly down on the week and facing its
first weekly loss in three.
"Mnuchin's comments were less belligerently reflationary
than they could have been, in a dollar strength context, and
that probably did much of the damage (to the dollar)," said UBS
Wealth Management currency strategist Geoffrey Yu, in London.
"But ultimately outside of the U.S. there is reflation
happening and data is looking strong, so perhaps it’s time to
just take some dollar longs off the table... We need additional
information to sustain (the Trumpflation trade)."
Subdued forecasts from European bluechips including BASF
and Vivendi and a drop in mining shares
following overnight declines in metals prices dragged the
benchmark STOXX 600 index down 0.3 percent.
Shares of Standard Chartered fell more than 5
percent after results.
London copper prices recovered slightly from their big
overnight fall on the back of fresh doubts about Chinese demand.
Three-month copper on the London Metal Exchange CMCU3 was up 0.8
percent at $5,907 a tonne by 0700 GMT after falling 3 percent in
the previous session.
Gold hit its highest in about 3-1/2 months on a weaker
dollar and safe-haven demand. Spot gold was up 0.4
percent at $1,254.10 per ounce.
Oil prices fell after U.S. crude inventories rose for a
seventh week, showing the market is still struggling to ease
oversupply despite producers' efforts to rein in output.
Benchmark Brent crude oil was down 48 cents at
$56.10 a barrel, while U.S. West Texas Intermediate
traded at $54.06 a barrel, down 39 cents.
(Reporting by Vikram Subhedar; editing by John Stonestreet)