“They’re clearly concerned about the global environment and that’s not good for a small open commodity producer (like New Zealand) and it’s also not good for Australia and the idea that risk currencies are exposed to the source of instability at the moment … and you shouldn’t necessarily buy those currencies against the USA dollar on this”.
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Although recent mixed U.S. data and turbulent global markets have been lowering investors’ expectation for the Fed to raise interest rates this month, there is still some optimism in the market as the meeting looms, Xinhua news agency reported.
THE Australian dollar briefly hit a four-week high after the US Federal Reserve kept its interest rate unchanged.
CMC chief market analyst Ric Spooner said the Fed statement indicated it was putting significant weight on the fact that global economies and financial developments are putting downward pressure on inflation, while the stronger U.S. dollar was exerting some tightening influence on the United States economy. But it fell 0.4% against the Korean won and retreated 1.2% versus the Malaysian ringgit.
The Federal Reserve has started its two-day meeting, with economists split on whether the central bank will lift rates for the first time since 2006.
“The market is pricing a 43 per cent chance of a cut from the Reserve Bank this year, but Mr Stevens just isn’t making the right noises to justify this probability”, Mr Weston said.
Ms Lawson said if the United States dollar weakens and oil prices stabilise, traders should “expect the merry-go-round to resume”.
Nikkei futures traded in Chicago pointed to a fall of about 0.9 percent in the Nikkei average.
Associate Professor of the stock markets and financial engineering department of the Faculty of Finance and Banking of RANEPA, Sergey Hestanov, told Vestnik Kavkaza that he expresses doubts that the US Federal Reserve System will make such a decision.
The buck had traded in a narrow range against most of its rivals during the past week as investors waited for the Fed’s decision, even as many expected the central bank to hold off Thursday, said Mark McCormick, global FX strategist based in New York.
Wesfarmers was flat at $39.20, while Woolworths added 0.49 per cent to $24.82.
BHP Billiton and Rio Tinto are both off by more than half a per cent, while CBA was down by about half a per cent at 1208 AEST.
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METALS: Gold fell $5.10 to $1,102.60 an ounce.
