The yen benefited from a flight to safety as stocks fell, while the dollar languished at three-week lows against a basket of currencies as expectations faded that the U.S. Federal Reserve will raise interest rates this year. MSCI’s emerging share index was up 2 percent after a two-day fall and hit its highest level since August. 13. CEW tracks the us dollar against the Mexican Peso, Brazilian Real, Chilean Peso, Colombian Peso, South African Rand, Polish Zloty, Russian Ruble, Turkish New Lira, Chinese Yuan, South Korean Won, Indonesian Rupiah, Indian Rupee, Malaysian Ringgit, Philippine Peso and Thai Baht.
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“The equity markets have started to move back in the Asian region and we’re seeing a countercyclical move up in the bond area”.
“The third-quarter selloff created a lot of value so people are getting involved again”, Tim Condon, head of Asia research at ING Groep NV in Singapore.
“Until the release of the US data such as retail sales and CPI (later this week), the dollar will likely remain directionless around where is hovering now”, said Sakai. “China’s policy remains accommodative”. It looks like this is exactly what it’s going to get, with expectations being for a 0.2% decline in price last month and core inflation only rising by 0.1%. The jobless rate held at 6.2 percent, matching the median forecast.
The United States dollar fell yesterday and gold continued to rise as markets priced the possibility that the Federal Reserve would not begin a tightening cycle this year, while U.S. stocks opened little changed.
Burberry Group Plc was the leading decliner on the FTSE 100 Index, with the shares tumbling the most since 2012 after the United Kingdom luxury-goods maker indicated profit will probably decline for a second straight year after sales in Asia dropped.
The greenback was at 119.68 yen compared with 119.72 yen on Tuesday in New York, after trading at 119.58 yen in early exchanges.
The currency appreciated 1.4 per cent to 4.1250 a dollar as of 8.54am in Kuala Lumpur as trading resumed following a holiday on Wednesday, prices from local banks compiled by Bloomberg show. The gauge earlier touched the lowest level since June 30. OCBC Bank put on 11 cents or 1.19 per cent to $9.32, and United Overseas Bank rose 26 cents or 1.31 per cent to $20.07. The regional FTSEurofirst 300 rose 1 percent after Asian bourses, also hoping for stimulus from China and Japan, hit their highest since mid-August. While the Fed is debating the right time to increase the rates, the European bank is brainstorming looser policy.
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The euro was up 0.1 percent at $1.1364 and the yen was 0.2 percent stronger at 120 to the greenback. In addition, the ZEW think tank said its indicator of economic expectations for Germany fell to 1.9 in October from 12.1 last month, while its current conditions index fell to 55.2 from 67.5 in September. The calculations are based on the assumption the effective fed funds rate will average 0.375 percent after liftoff. For March, the probability has tumbled to about 50 percent, from 66 percent at the start of the month.
