Optimism on rates sends Dow soaring
Hopes that US interest rates will fall next week were boosted yesterday by weaker-than-expected figures for industrial output in December. The news drove the Dow Jones industrials index up more than 50 points to a record 5,242.48 by late morning before retreating slightly, writes Diane Coyle.
Treasury bonds gain more than half a point. Separate figures showing Japan's annual trade surplus with America had shrunk for the first time for five years took the dollar to its highest level for nearly two years. It rose more than a yen to 106.95 before closing at 106.82 in London. It also rose above DM1.48, partly due to a further reduction yesterday in the German Bundesbank's repo rate, a key money market interest rate. The pound fell slightly to $1.5130.
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