Stocks cower as dollar heads to two-decade highs

STORY: World stocks fell towards their lowest in more than a year Friday (May 6), while the U.S. dollar hit 20-year highs.

The dollar was heading for its fifth straight week of gains after the Federal Reserve raised rates by 50 basis points this week.

Investors fear that bigger interest rate hikes will be needed to tackle decades-high inflation.

The market has now priced in another hike of 75 basis points in June.

In Europe, stocks fell more than 1% to their lowest in two months.

Earnings also added to the downbeat mood in Europe.

Sportswear giant Adidas fell 4% as it lowered expectations for sales this year.

It blamed lockdowns in China for hitting sales.

MSCI’s broadest index of Asia-Pacific shares outside Japan also fell close to 3% - to its lowest since mid-March.

While China’s yuan dropped to an 18-month low.

That as Chinese state television said the country would fight any comments that doubted its strict response to the health crisis.

Investors said that appeared to rule out curbs being eased - which have slowed Chinese economic growth and hurt global supply chains.

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