FED MIXED SIGNALS: Notes of the Fed’s July meeting showed officials saying a rate hike might be warranted but gave no indication of timing.
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USA stocks recouped mid-session losses to finish slightly higher on Wednesday as the Federal Reserve’s meeting minutes showed a continued reluctance to jump to any conclusions about the state of the economy. The Bank of Japan, which underwhelmed the markets in July with what many investors deemed were token easing steps, will conduct a comprehensive policy review in September.
This week, William Dudley, president of the Federal Reserve Bank of NY and a close ally of Fed Chair Janet Yellen, said in a television interview that a September rate hike is “possible”.
United States stocks retreated on Tuesday as investors digested a batch of economic reports.
TOKYO/SINGAPORE, Aug 18 (Reuters) – The dollar hit a seven-week low against a basket of major currencies on Thursday, after minutes from the Federal Reserve’s July meeting showed policy committee members opposed to a near-term rate hike outnumbered those who wanted one.
The euro edged up 0.2% to $1.13060 with the common currency on track to rise more than 1% this week.
The won strengthened 0.2% to 1,107.20 per dollar as of 10:01 a.m.in Seoul after sliding 1.5% Wednesday, according to prices from local banks compiled by Bloomberg. But many think the Fed will lack enough certainty to act, especially if inflation remains far below the Fed’s target.
A rise in United States borrowing costs would tend to lift the greenback by stirring demand for dollar-denominated assets. They anxious that continuing to maintain a prolonged period of very low rates could cause investors to weight certain investments to much or even overvalue certain assets, possibly leading to a destabilizing financial bubble and bust.
“The Fed is inching closer to a rate hike, but it likely isn’t there yet”, said Sal Guatieri, senior economist at BMO Economics.
“We are edging closer towards the point in time when it will be appropriate to raise rates further”, he said.
ASIA’S DAY: Hong Kong’s Hang Seng rose 1 percent to 23,028.08 while the Shanghai Composite Index lost 0.2 percent to 3,104.11.
Brent last traded at $50.82 a barrel, up almost 2 percent on the day.
It was up 0.5 percent at 100.81 yen, having fallen as low as 99.550 yen in the previous session, its lowest since the stormy aftermath of the Brexit referendum on June 24 sent investors scrambling for the perceived security of Japan.
ENERGY: Benchmark U.S. crude shed 8 cents to $46.71 per barrel in electronic trading on the New York Mercantile Exchange.
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In earnings news, Urban Outfitters Inc’s (URBN – Analyst Report) shares jumped 15.4% after reporting fiscal second quarter earnings per share (EPS) of 66 cents, outpacing the Zacks Consensus Estimate of 56 cents and increasing 26.9% year over year.
