“The market is trying to price in what is going to happen tomorrow and this morning it tracked USA futures which priced in a 28 per cent chance of a hike with a 63 per cent (chance of a) hike in December”, Ms Lee said.
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The Federal Reserve “made the decision appropriately by monitoring various situations”, Chief Cabinet Secretary Yoshihide Suga told a news conference after the Fed chose to maintain ultralow interest rates for now. Higher United States rates reduce the allure of emerging-market assets.
The global Monetary Fund says it will work with any Greek government resulting from Sunday’s election, but remains mum about its participation in another bailout of the country.
BANK BLUES: JPMorgan Chase fell $1.65, or 2.6 percent, to $61 as investors judged that lower interest rates for longer mean banks won’t be able charge more for loans.
The Fed did surprise some in the market by saying “recent global economic and financial developments may restrain economic activity somewhat” and put downward pressure on inflation in the near term, taken as a reference to slowing growth in China, where stocks have tumbled.
On Friday, the rupee hit its largest daily gain as bond yields declined to near 3-month cellar, as the central bank’s decision to hold US interest rates was viewed as setting the stage for the Reserve Bank of India to ease its financial ruling later this month. The greenback was little changed at 120.53 yen and weakened 0.1 percent to $1.1301 per euro. “The Fed’s decision has introduced heightened volatility in the market”.
Thirteen of the 17 Fed officials at the meeting indicated they expect a rate hike by the end of this year.
That in turn supported Wall Street shares, with S&P 500 index.SPX rising 0.9 percent to 1,995.31, its highest close in almost a month, having pared just about a half of its fall from July to late August.
“We are now a distance away from the rate increase (in the U.S.)”, said Uchida, adding that future rate increases have become “more uncertain”.
“It was U.S. dollar negative, which was why we saw the New Zealand dollar rally”, Sam Tuck, senior foreign exchange strategist at ANZ Bank, said.
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At 0635 GMT, the dollar was down 0.18% against the yen fetching JPY119.7900 to the preferred carry trade currency.
