Asia stocks, dollar steady
Asian stocks steadied yesterday and the dollar held firm as investors awaited the Federal Reserve's policy decision later in the day for more clues on its tightening plans.
European stock markets mainly steadied at the start of trading yesterday, with all eyes on the Federal Reserve's upcoming US interest rate decision and outlook.
London's benchmark FTSE 100 index gained nearly 0.2 percent to 7,446.69 points compared with the close on Tuesday.
In the eurozone, Frankfurt's DAX 30 nudged down a few points to 12,260.30 and the CAC 40 index in Paris edged up to 5,162.24 points.
Expectations that the European Central Bank would begin phasing out its easy monetary policy sooner rather than later have supported the common currency this month.
The Fed concluded its two-day meeting later yesterday, and is widely expected to keep interest rates unchanged.
With a rate hike not in the picture this time, the focus will be on the Fed's statement, with markets looking for signs of when the central bank will begin paring its massive bond holdings and next raise rates.
“The stock markets are generally of a view that the Fed is not in too much of a hurry to normalize monetary policy.
So equities would be able to take this Fed meeting in stride if the Fed's statement is in line with such views,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.
Federal funds futures implied traders saw the chance of a Fed rate increase in September at about 8 percent and a December hike possibility at 48 percent.
A more assertive policy message by the Fed, on the other hand, would likely lift US yields and boost the dollar.
MSCI's broadest index of Asia-Pacific shares outside Japan was little changed, but drew mild support after the S&P 500 climbed to an all-time high overnight on well-received results from McDonald's and Caterpillar in addition to bank share gains.
Australian stocks gained 1 percent with a smaller-than-expected rise in local inflation supporting views that interest rates will remain at record lows for some time to come.
The Australian dollar slipped 0.5 percent to US$0.7896.
Japan's Nikkei added 0.5 percent after the dollar rallied against the yen overnight to pull away from seven-week lows.
Shanghai shed 0.4 percent on lingering fears of further regulatory tightening, while South Korea's KOSPI lost momentum after touching a record high the previous day and slipped 0.3 percent.
The dollar regained some ground against major currencies in the previous session after US Treasury yields jumped the most in almost five months in response to Wall Street's rise and on reduced demand for safe-haven bonds.
But the greenback remained hobbled by uncertainty about the progress of healthcare reforms and the prospect of further delays for President Donald's Trump's ambitious stimulus and tax reform polices.
Political Uncertainty
The dollar has also been kept in check by political uncertainty as lawmakers investigate possible meddling by Russia in the 2016 presidential election and whether there was any collusion by Trump's campaign.
The euro was effectively flat at US$1.1639, pulling back from a two-year high of US$1.1712 hit on Tuesday on a stronger-than-expected German Ifo business survey.
The dollar index against a basket of major currencies was little changed at 94.143, after managing to put some distance between a 13-month low of 93.638 plumbed on Tuesday.
The dollar was steady at 111.905 yen after surging about 0.7 percent overnight. -Nampa/Reuters/AFP
London's benchmark FTSE 100 index gained nearly 0.2 percent to 7,446.69 points compared with the close on Tuesday.
In the eurozone, Frankfurt's DAX 30 nudged down a few points to 12,260.30 and the CAC 40 index in Paris edged up to 5,162.24 points.
Expectations that the European Central Bank would begin phasing out its easy monetary policy sooner rather than later have supported the common currency this month.
The Fed concluded its two-day meeting later yesterday, and is widely expected to keep interest rates unchanged.
With a rate hike not in the picture this time, the focus will be on the Fed's statement, with markets looking for signs of when the central bank will begin paring its massive bond holdings and next raise rates.
“The stock markets are generally of a view that the Fed is not in too much of a hurry to normalize monetary policy.
So equities would be able to take this Fed meeting in stride if the Fed's statement is in line with such views,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.
Federal funds futures implied traders saw the chance of a Fed rate increase in September at about 8 percent and a December hike possibility at 48 percent.
A more assertive policy message by the Fed, on the other hand, would likely lift US yields and boost the dollar.
MSCI's broadest index of Asia-Pacific shares outside Japan was little changed, but drew mild support after the S&P 500 climbed to an all-time high overnight on well-received results from McDonald's and Caterpillar in addition to bank share gains.
Australian stocks gained 1 percent with a smaller-than-expected rise in local inflation supporting views that interest rates will remain at record lows for some time to come.
The Australian dollar slipped 0.5 percent to US$0.7896.
Japan's Nikkei added 0.5 percent after the dollar rallied against the yen overnight to pull away from seven-week lows.
Shanghai shed 0.4 percent on lingering fears of further regulatory tightening, while South Korea's KOSPI lost momentum after touching a record high the previous day and slipped 0.3 percent.
The dollar regained some ground against major currencies in the previous session after US Treasury yields jumped the most in almost five months in response to Wall Street's rise and on reduced demand for safe-haven bonds.
But the greenback remained hobbled by uncertainty about the progress of healthcare reforms and the prospect of further delays for President Donald's Trump's ambitious stimulus and tax reform polices.
Political Uncertainty
The dollar has also been kept in check by political uncertainty as lawmakers investigate possible meddling by Russia in the 2016 presidential election and whether there was any collusion by Trump's campaign.
The euro was effectively flat at US$1.1639, pulling back from a two-year high of US$1.1712 hit on Tuesday on a stronger-than-expected German Ifo business survey.
The dollar index against a basket of major currencies was little changed at 94.143, after managing to put some distance between a 13-month low of 93.638 plumbed on Tuesday.
The dollar was steady at 111.905 yen after surging about 0.7 percent overnight. -Nampa/Reuters/AFP
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