Producers of metals and other raw materials fell as the dollar continued to strengthen against a basket of rival currencies.
The dollar rose on inflation concerns, on a belief that the Federal Reserve will soon tighten policy to ward off inflation, and on a general wave of risk aversion. Among high-risk currencies, the British pound sterling fell by more than 1%.
The dollar may continue to strengthen against the euro and other currencies because of a “decoupling” in the rate of economic growth over the last two decades, said strategists at brokerage Bank of America Global Research, in a note to clients.
Among the potential structural reasons for the U.S. outpacing Europe’s growth, according to the brokerage is the younger U.S. working-age population.
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