The ringgit closed marginally higher against the US dollar today, amid the US Federal Reserve’s (Fed) annnouncement of a quarter-point interest rate increase.
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In Tokyo trading, the US dollar rose to 121.87 yen from 121.66 yen Tuesday in NY, while it gained 0.18 percent against the Malaysian ringgit, and also ticked up against Thai baht, Indonesian rupiah and Singapore dollar. “The fact that risk appetite was retained was key to the dollar’s strength, in addition to the rise in Treasury yields”, said Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo.
That suggests the action after the Fed’s first move in a decade is more likely to come on a handful of emerging currencies and in credit and other markets than on the big FX pairs.
The safe haven yen and Swiss franc were lower, with USD/JPY edging up 0.13% to 122.37 and USD/CHF advancing 0.54% to 0.9955.
On Wall Street Tuesday, the Dow .DJI added 0.9 percent and the S&P 500 .SPX advanced 1.1 percent.
The U.S. dollar gauge had weakened earlier this month as some traders anticipated a sell-off in the currency once the central bank announced its decision to set the new target range for the fed funds rate at 0.25 percent to 0.5 percent, up from zero to 0.25 percent. However, a USA rate increase tonight and the attendant dampening of American demand for Canada’s major export – Black Gold – would surely see the Loonie incur fresh losses and perform on a NEGATIVE bias. The common currency ended Wednesday 0.6 percent lower after going as high as $1.1013.
“I would be cautious in interpreting too much into (the hawkish tilt to the statement), particularly as for exchange rates what was relevant was that apart from lower oil prices, the appreciation of the US dollar was dampening inflation at the moment”, she said.
MELBOURNE, Dec 17 (Reuters) – London copper slipped on Thursday after the Federal Reserve’s first rate hike in nearly a decade pushed up the dollar, though greater confidence in a global economic recovery should help to firm up a floor for prices.
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Fed Chair Janet Yellen emphasised that further tightening would be gradual and data dependent. USA crude was down 1.3 percent at $36.87 a barrel.
