Britain’s top share index rose on Thursday, inching back towards its highest level of the year, buoyed by a rally across global stock markets after the Federal Reserve’s decision to keep US interest rates on hold.
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The European oil and gas index rose 2.4 per cent, helped by a 2.4 to 5.1 per cent rise in BP, Total and Saipem.
With a decision to forgo a hike in its key interest rate on Wednesday – and the USA presidential election coming just days after the central bank’s next two-day policy meeting in November – the betting is now on the long-promised re-launch being pushed back to the final month of 2016. It also projected a less aggressive rise in rates next year and in 2018, and cut its longer-run interest rate forecast to 2.9 per cent from 3.0 per cent.
Adding some support for the Fed to raise rates later this year, a report showed number of Americans filing for unemployment benefits unexpectedly fell last week to a two-month low.
Inflation for the year is now expected to register at 1.3 percent, down slightly from June’s projections and still well short of the Fed’s 2 percent inflation target. The Bank of Japan adjusted its stimulus program. Fed officials indicated they foresee one rate hike before the end of the year.
Exchange rate regime applied in Azerbaijan stipulates that the Dollars rate depends on demand-supply ratio in the currency market, not the FRS decision, therefore key interest rate is not the most significant factor affecting the change in the national currency of Azerbaijan.
Asian shares edged closer to 14-month highs today while the dollar was on the defensive as investors grew more convinced that the Federal Reserve is settling into a phase of very gradual interest rate hikes.
The BOJ’s policy shift is unlikely to prevent the yen from rising further, said Heng Koon How, senior FX investment strategist for Credit Suisse. “Overall, this does not change our view of yen strengthening off the back of Japan’s strong current account surplus”, Heng said.
The dollar was up 0.3 percent at 101.04 yen, pulling away from a almost four-week low of 100.10 touched overnight though still poised to shed 1.1 percent for the week.
Chair Yellen said many major world economies are also pursuing economic growth through central bank policy. The won jumped 1.6 percent and the rand was up 1.2 percent.
The three dissidents, all of whom voted in favor of raising interest rates by a quarter-point in September, were Esther George, president of the Federal Reserve Bank of Kansas City; Loretta Mester, president of the Federal Reserve Bank of Cleveland; and Eric Rosengren, president of the Federal Reserve Bank of Boston.
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The RBNZ kept its benchmark interest rate unchanged at 2.0 percent yesterday but reiterated that further easing will be required.
