Spreadbetters forecast a slightly lower open for Britain’s FTSE, Germany’s DAX and France’s CAC.
Advertisement
The US dollar sagged against its peers as some in the currency market had hoped the Fed would give a clearer indication that it could raise rates within the year.
MSCI’s broadest index of Asia-Pacific shares outside Japan, which briefly climbed to its highest level since August 2015, clung to gains and was last up 0.1 percent. Sydney, however, added 0.3 percent, while Shanghai edged up 0.1 percent after suffering a hefty loss Wednesday.
News that Chinese regulators are planning a tough clampdown on wealth management products to curb risks to the banking system had weighed heavily on Chinese stocks, with investors still wading through the details.
The yen, meanwhile, notched its fourth rise in six days as news that Tokyo had unveiled a surprisingly large 28 trillion yen ($265 billion) stimulus package left traders wondering how aggressive the Bank of Japan would be when it meets on Friday.
The strong yen sent Japan’s Nikkei tumbling as the country’s central bank began its own two-day policy meeting.
The upbeat futures reflect the widely held belief that the Fed will leave interest rates unchanged despite encouraging economic news and better-than-expected earnings.
The Fed did say, however, that near-term risks to the US economic outlook had diminished, opening the door for a potential near-term hike in the eyes of many.
“There is a lot of data between now and the mid-September policy meeting, so more evidence of solid growth and rising inflation could lead the Fed to act”, Richard Jerram, chief economist at Bank of Singapore, said in a note. “The reverberations of this re-pricing can be seen in weakness in the United States dollars and a bold rally in gold”, wrote Chris Weston, chief market strategist at IG in Melbourne.
In late NY trading, the euro rose to $1.1009 from $1.0986 of the previous session, and the British pound rose to $1.3172 from $1.3143, Xinhua news agency reported.
Spot gold, down initially, reached its highest since July 12 at $1,348.60 U.S.an ounce after the US data and was up 1.8% at $1,352.48 U.S. Still, markets took the message that the Fed isn’t in a rush to hike rates, which meant the kiwi dollar remained well supported, with expectations that New Zealand’s looming rate cuts won’t be deep enough to diminish the appeal of the yield on offer.
The euro, which gained 0.7 per cent overnight, edged up to a nine-day high of US$1.1074.
The pound continued to have trouble finding a foundation, slipping 0.1% to $1.3134 at 9:46 p.m. EDT after closing higher in NY.
The dollar slid 0.3 percent to 105.12 yen at 10:42 a.m.in Tokyo, after advancing 0.7 percent Wednesday. US crude rose 0.2 percent to $42.02 a barrel after dropping sharply on news USA crude and gasoline stocks had surged.
Advertisement
Tokyo’s Nikkei gained 1.3% while the Hang Seng in Hong Kong slipped 0.07% and Korean Kospi pared 0.03% at 9:20 p.m. EDT.
