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Volkswagen to Cut Jobs as Europe Closes Lower

volkswagenOn Friday, European stocks closed lower as US treasury yields continue to push the US Dollar towards a 13 and a half year high. Investors were waiting on comments from Fed President Janet Yellen. In European corporate news, Volkswagen laid off 30,000 employees.

The pan-European STOXX 50 was up on the day after reversing earlier losses but most of its major sectors were in the red. The index closed lower. These losses were led by basic resources, which were down 1.9 percent thanks to a stronger US Dollar.

Federal Reserve Chair Janet Yellen spoke to Congress, later in the session, and said that an increase in interest rates would be “appropriate very soon.” Any rise in the benchmark rate would be seen as Fed confidence in the US economy. There are also investor interest in President-elect Donald Trump and is expansionary fiscal policies which will stoke inflation.

Treasury Yields Continue to Climb and Volkswagen announces Layoffs

This fiscal expansion, or hope of one, has led to a selloff of US treasuries which has caused yields to soar higher. The US 10 year has hit its November high while the US Dollar has also spiked higher. The US Dollar index is at a 13 and a half year high, as of European trading on Friday. We have not seen the Dollar at this level since April 2003.

In corporate news, embattled Volkswagen, has announced it will cut 30,000 jobs by 2021 at its VW brand. This is an attempt to boost profitability and focus on other areas like driverless cars and electric automobiles. They are also attempting to recover from a devastating emissions scandal. Shares of the German automaker fell 0.81 percent on Friday.

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