WEDNESDAY, 11.00AM
THE Dow Jones industrial index leapt back over the 8 000-point mark on Tuesday following US Federal Reserve chairman Allan Greenspan’s mid-year economic report to Congress, in which he said that inflationary pressures had remained tame.
Greeenspan’s view on inflation is widely shared, but markets were nonetheless jittery prior to his address to Congress. Greenspan warned, however, that he would increase interest rates at the first sign of inflation. Following Greenspan’s address, Wall Street surged, with the Dow Jones industrial average peaking at 8 061, higher than last Wednesday’s record 8 038,88, its first foray above 8 000.
In currency markets, the dollar raced ahead even before Greenspan’s speech, with the dollar pushing its 71-month high against the German mark as the mark took a general battering. The rand, meanwhile, hit six-month lows against the dollar but charted a 17-month high against the mark, and gained marginally against the pound.