The dollar stayed on the front foot on Thursday, hovering near 3-1/2 week highs against a basket of currencies after the Federal Reserve surprised markets with a more hawkish policy tone and signaled its confidence in the US economic recovery. The Fed released a statement that underscored the improving US labour market, dismissing recent financial market volatility, European growth challenges and largely weak inflation outlook. While the central bank said interest rates would remain low for a "considerable time," the Fed's statement helped to push up US yields and increased the greenback's appeal.
"Although the Fed's statement was hawkish than markets had expected, Wall Street shares didn't fall much. It means that the market took the hawkish tone as the Fed's confidence in the US economy." said Kengo Suzuki, chief forex strategist at Mizuho Securities. The yield on benchmark 10-year Treasury notes stood at 2.309 per cent in early Asian trade, not far from its US close of 2.323 per cent, after rising for six of the past seven sessions. The dollar index, which measures the US currency against a basket of six major rivals, rose to 86.083, after touching 86.143, its highest level since October 6, in the wake of the Fed's announcement. Against the yen, the greenback rose above 109 yen for the first time in 3-1/2 weeks. The pair last traded at 108.98 yen . The euro was steady at $1.2625 after touching a fresh one-week low of $1.2616 earlier in the Asian session. Muzuho's Suzuki said the dollar may head toward the six- year high of 110.09 marked at the start of this month as soon as next week.
The New Zealand dollar, meanwhile, fell sharply after that country's central bank sounded a bit more dovish following a widely expected decision to leave interest rates unchanged. The kiwi, already under pressure against a firmer US dollar, fell to around $0.7770 from around $0.7820 before the announcement. It last traded at $0.7808. Elsewhere, Brazil's central bank raised interest rates on Wednesday, surprising investors with a bold move that signals President Dilma Rousseff could make more market-friendly policy changes after her narrow re- election victory on Sunday.
Written by Unknown
We are Creative Blogger Theme Wavers which provides user friendly, effective and easy to use themes. Each support has free and providing HD support screen casting.
0 comments:
Post a Comment