“It’s doom and gloom here, the biggest bears are the Chinese, the general view is that little will improve next year”, said a fund source in Shanghai, which is hosting the year’s biggest copper industry meeting in Asia this week.
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He mentioned the bank could cut the rate charged banks to stash money at the ECB’s super-safe deposit facility from a negative 0.2 percent. On a quarterly basis, Japan’s economic output fell 0.2% in the third quarter versus the quarter before, weaker than forecasts of a 0.1% decline. That signalled stabilisation in the housing market, which could help re-energise the listless economy.
“There has been no major upturn in market volatility, but no doubt the attacks in Paris will raise further the uncertainty over the outlook for the euro zone economy”, said Derek Halpenny, European head of global markets research at Bank of Tokyo-Mitsubishi.
“Markets are likely to be going back and forth for now”, he added.
The dollar firmed against the euro Monday as investors sought the safety of the USA currency after the Paris terror attacks renewed concerns about the struggling eurozone economy.
In contrast with the Fed’s expected course of action, the Bank of Japan (BoJ) is expected to hold steady at its two-day policy meeting that began on Wednesday.
“We’re seeing very encouraging signs today, especially the dollar’s strength against the yen and the aggressive gains we’re seeing in a few cyclical stocks, particularly those with United States exposure”, Credit Suisse cash equities manager Stefan Worrall said in Tokyo.
While the euro weakened, losses may be limited by its emergence as a refuge asset in recent months.
USA consumer prices increased in October from the previous month after two consecutive months of declines, putting annual core inflation at 1.9%.
A chorus of Fed officials also backed investors’ expectations of a rate hike, with Fed President Dennis Lockhart, NY Fed President William Dudley and Cleveland Fed President Loretta Mester all expressing confidence that the policy tightening, when it comes, will be implemented smoothly for markets.
The Bloomberg Dollar Spot Index, which tracks the greenback versus 10 peers, rose 0.1 percent to 1,236.34 as of 3:03 p.m.in NY, after reaching its highest level in more than a decade.
The us dollar (.DXY) edged up 0.02 percent against a basket of currencies after hitting a seven-month high on Tuesday, while the euro (EUR=) rose 0.06 percent against the greenback. There is however a higher likelihood that the European Central Bank will provide significant easing in an attempt to propel the EZ out of the low inflation environment, and this will see the euro approach parity against the buck, and depreciate concomitantly against various other counterparts.
In a report released earlier this week it was reported that Germany’s wholesale prices index fell unexpectedly last month.
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The pan-European FTSEurofirst 300 index (.FTEU3), which had risen 2.6 percent on Tuesday, dipped 0.2 percent Wednesday, with industrial gas company Air Liquide (AIRP.PA) off sharply after announcing an expensive-looking acquisition.
