Saudi IT firm solutions by stc posts higher profit of $228m as revenues jump 

Jeddah - Yasmine El Tohamy - LONDON: The euro on Wednesday jumped back above parity with the dollar, the US currency sliding against its main rivals on concerns over the world’s biggest economy.

The euro bounced back above one dollar for the first time since mid-September, helped also by expectations of a big interest rate hike from the European Central Bank on Thursday.

There were large gains against the dollar also for the British pound and yen, helping them to recover some ground after recent sharp losses.

The dollar retreated following “a string of negative (US) economic data released since the beginning of the week,” noted ActivTrades senior analyst Ricardo Evangelista.

Poorly received data, including slower house price growth and weaker consumer confidence, showed that big rate hikes from the Federal Reserve are “starting to open some cracks in the American economy,” he said.

“The Federal Reserve has been hiking rates aggressively in an attempt to bring inflation under control, and the country’s economy is starting to suffer as a result,” Evangelista added.

Sterling on Wednesday jumped more than one percent against the dollar, winning a boost also from markets welcoming the appointment of Rishi Sunak as prime minister.

The move was seen as offering stability to the UK economy after weeks of upheaval fueled by predecessor Liz Truss’s tax-cutting budget.

The dollar also slumped against the yen following recent 32-year highs, as the Bank of Japan holds off from raising interest rates.

Stock markets were mostly lower Wednesday as traders digested another batch of earnings from some of the world’s biggest companies.

Banks are enjoying large profits as interest rates rise but there are concerns over bad loans, as the global economy is threatened by possible recession.

Shares in Barclays fell 0.7 percent despite the British bank announcing a 10-percent jump in quarterly net profits.

Google parent Alphabet meanwhile reported quarterly earnings that fell short of market expectations as belts tightened in the digital ad market that drives its revenue.

Alphabet shares slipped 6.8 percent to $97.35 in after-market trades that followed the release of the earnings report.

They opened down 8.5 percent.

“When Google stumbles, it’s a bad omen for digital advertising at large,” said Insider Intelligence analyst Evelyn Mitchell.

“This disappointing quarter for Google signifies hard times ahead if market conditions continue to deteriorate.”

Wall Street opened lower, with the Dow shedding 0.1 percent.

But the tech-heavy Nasdaq fell 2.1 percent at the start of trading, dragged down by Alphabet and shares in Microsoft, which tanked 7.9 percent after the company also reported results late on Tuesday.

In afternoon trading in Europe, both London and Paris were lower, while Frankfurt was holding on to a marginal gain.

In recent weeks, stocks have surged higher when the dollar and bond yields pulled back on economic news that could give the Fed reason to pause its interest rate hikes.

Analyst Patrick O’Hare at Briefing.com said it was unclear whether the downgraded earnings estimates being released by companies would prompt investors to recalibrate their equity portfolios or move out of stocks.

“Today will be a test of sentiment and a gauge of how much the weakening fundamental outlook has been priced into the broader market already,” he said.