The recent moves in the health and drug production market both in Europe as well as the U.S. have led to a stronger dollar and a rising equity market while stocks from China have reached their highest value in the last seven years after plans detailing the government backed Silk Road trade route with Europe have been announced.
The dollar’s recent rise has been fueled these weeks by merger news announced by some major drug companies while both U.S. and European indexes managed to register an over 1 percent growth rate. The Federal Reserves’ plan to increase interest rates in 2015 has also led to some appreciation for the dollar.
Among the most remarkable purchases in the highly active health and drug industries some stood out as the major cause for the stronger dollar. UnitedHealth Group Inc bought Catamaran Corp for the sum of $12.8 billion while Teva Pharmaceutical Industries, one of the biggest drug producers in Israel agreed to buy the U.S’s Auspex Pharmaceuticals Inc for the sum of $3.5 billion. Horizon Pharma Plc, based in Ireland, also finished the deal for the purchase of the U.S. Hyperion Therapeutics Inc for close to $1.1 billion.
The Chinese market also rose after plans detailing a new Silk Road between Asia, Europe and Africa were unveiled by Chinese president Xi Jinping. The Chinese president also said that the new trade route would provide $2.5 trillion in revenue annually for all countries involved.
The European market also rose recently, particularly Germany’s DAX index which saw growth of 1.8 percent finishing just 1 percent under its all-time high. The FTSEEurofirst Index also rose by 1.18 percentage points closing at 1,596.31.
The strong results of these major markets including the Dow Jones also made regular investors more willing to spend money, leading to further growth, according to investment analysts. The surge in confidence was mainly based on corporations’ willingness for large acquisitions.
The Euro lost ground against the dollar, particularly due to the possibility of Greece not getting access to the 240 billion aid package before the country runs out of funds in three weeks. The euro lost 0.71 percent against the U.S. dollar, raising its quarterly loss to 10.6 percent, the biggest fall since the Euro was instated back in 1999.
Oil prices were also down as a deal between Iran and a G6 group on the Middle Eastern country’s nuclear program could mean an end to sanctions and more crude Iranian oil on the market.