-
Tips for becoming a good boxer - November 6, 2020
-
7 expert tips for making your hens night a memorable one - November 6, 2020
-
5 reasons to host your Christmas party on a cruise boat - November 6, 2020
-
What to do when you’re charged with a crime - November 6, 2020
-
Should you get one or multiple dogs? Here’s all you need to know - November 3, 2020
-
A Guide: How to Build Your Very Own Magic Mirror - February 14, 2019
-
Our Top Inspirational Baseball Stars - November 24, 2018
-
Five Tech Tools That Will Help You Turn Your Blog into a Business - November 24, 2018
-
How to Indulge on Vacation without Expanding Your Waist - November 9, 2018
-
5 Strategies for Businesses to Appeal to Today’s Increasingly Mobile-Crazed Customers - November 9, 2018
Dollar rebounds after Fed-induced plunge
A decision by the US Federal Reserve Bank (Fed) to keep its benchmark interest rate unchanged on Thursday gave African policymakers some breathing room as it ended speculation their local currencies would depreciate further against the dollar.
Advertisement
The financial markets and US economic data have both amply demonstrated that it would be premature for the Fed to raise rates and slow the economy down-and it is a relief that the FOMC agrees. According to Venkatesh this week the rupee may trade in the range of 65.50 to 66.25 per dollar with a weakening bias.
Mr Spooner said, however, that inflation in the USA appeared unlikely to increase by much over the rest of 2015, so interest rates in the United States may be kept on hold until early in 2016.
However he also pointed out: “It [the decision to keep rates on hold] reflects concerns that the Fed has been deflected from raising rates by fear about the global economy, and especially China, which is an even bigger worry for the commodity markets”.
The New Zealand dollar is heading for a one per cent weekly gain against the greenback, supported by increases in dairy prices at the third straight GlobalDairyTrade auction and a more dovish US Federal Reserve.
The broader All Ordinaries index was up 47.6 points, or 0.93 per cent, at 5,171.2 points.
“The main mover has been the Fed’s decision not to hike interest rates“, Mr Turner said.
St George senior economist Janu Chan said bond prices rose after the no-change decision but lost a little ground afterwards.
The dollar index, which measures the greenback against six major currencies, was down 0.30 percent at 95.325 in late trading.
“If tomorrow we don’t see that happening and we see a rate hike in September then we will see the gains from today disappear”.
Advertisement
“Markets will likely remain in that Fed-obsessed limbo”, she said. Analysis by French bank BNP Paribas shows that a steady erosion of bets for more appreciation since March has left positioning on the US currency flat, meaning relatively few longer-term players will be forced to sell if the Fed does not deliver a rise. “What we need to do is to continue doing what we are doing, which anyway is the intention, regardless of the Fed“, said Raghuram Rajan, Reserve Bank of India governor, at an event on Friday.