SINGAPORE-The dollar stumbled to a near 4-week low against the yen on Thursday, after the U.S. Federal Reserve kept monetary policy steady and projected a less aggressive path for interest rates hikes in coming years. Brent crude futures LCOc1 also rose 0.9 percent to $47.23, adding to gains of 2 percent on Wednesday.
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USA crude (WTI) futures advanced 0.9 percent to $45.75 after soaring 2.9 percent on Wednesday. On Wall Street, the future for the Dow Jones industrial average was up 0.1 percent while the Standard & Poor’s 500 was unchanged.
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“There’s an opportunity, taking the move down in treasury yields post-FOMC, to go long dollars here, at 100.30, with a tight stop (99.00) on the grounds that I just don’t think we can push (U.S. government) TIIPS yields. much lower”.
The Fed said its policy committee had concluded that “the case for an increase in the federal funds rate has strengthened but decided, for the time being, to wait for further evidence of continued progress towards its objectives”.
Late on Wednesday evening, the Fed signalled that it could still increase rates before the end of 2016, provided there is an improvement in the labour market.
The US central bank’s decision followed Bank of Japan’s decision to maintained its 0.1% negative interest rate. It promised to keep expanding the nation’s money supply until inflation surges above 2 percent for an unspecified time. The Fed said the case for a rate rise “has strengthened”, though its so-called dot plot chart of interest rate projections suggested it sees two rate rises in 2017 rather than the three envisioned in June.
Shares of Indian Oil Corp rose as much as 1.1 percent and Gail (India) Ltd gained up to 1.76 percent after the companies agreed to buy a combined 49 percent stake in a liquefied natural gas terminal being built in Odisha.
In conjunction with this, the bank committed itself to expanding the monetary base until the year-on-year rate of increase in the observed consumer price index “exceeds the price stability target of 2 percent and stays above the target in a stable manner”. Japan is closed for a public holiday today.
Australian shares .AXJO rose 0.8 percent, while South Korea’s KOSPI .KS11 advanced 1.1 percent.
ENERGY: Benchmark U.S. crude added 28 cents to $45.63 per barrel in electronic trading on the New York Mercantile Exchange. The contract added 69 cents on Wednesday. “Financial conditions have eased over the course of the year, partly on the back of a weaker dollar and lower bond yields, and now at more accommodating levels than a year ago, lowering the bar for a December hike”. It gained 95 cents the previous session.
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In commodity markets, gold traded down 0.3 percent at $1,332.63 an ounce, having climbed 1.7 percent as the US dollar declined on Wednesday.
