The United States’ currency as stumbling down on the recent Federal Reserve meeting which was concluded this Wednesday; the minutes showed that the hawkish tone banishes from their recent meeting. The Fed is looking to delay the next interest rate hike, as minutes from the meeting showed that the lawmakers mentioned that the next hike will be at “in the near term”.
The dollar took the receiving end of the massive lackluster minutes of the meeting; the currency was down on new lows after bullish runs in the past couple of weeks. The dip was the lowest ever since October’s figures.
Asian Market Movement
Asian currencies manage to capitalize on the weaker dollar and even extending the gold’s prices after analysts cautiously bet on the commodity before the Fed meeting. The moves in the Asian market were incremental due to the Japanese market being closed for the day due to a holiday.
The Japanese yen was up by an impressive 0.3% at 111.27 per dollar, while the Australian dollar managed to climb by 0.3% today against the dollar at $0.7613. The euro was also bullish on the recent bearish dollar with a total increase of 0.2 at $1.1814.
On the other hand, the weaker dollar also managed to leverage some gains on the Treasuries; it managed to gain a massive 10-year yield push to 2.32%. The gold and oil managed to rally as well; both increasing by a massive 1% on the yellow metal and the oil managed to ease just before closing at stagnant figures with little to no movement.
The local indices were also struck by the weaker dollar; the S&P 500 was disappointingly dipping today, falling by a total of 0.1% just before
Analysts on Fed’s Minutes
According to Brad Bechtel, a currency strategist at Jeffries, “They are still discussing the inflation issue internally and that seems to be the major source of disagreement as one would expect,” and “December seems firmly on the table but 2018 remains a bit of a wildcard. The USD move is a bit of position unwind ahead of the long holiday weekend given that most will be out of the office Friday.”
On the other hand, a portfolio manager at Alpine Funds, Mark Spellman, noted that “There’s nothing antithetical about raising rates when the economy is doing well,” and “We don’t have a dollar problem, we don’t have an inflation problem. This is just purely: We were at zero rate policy for so many years, emergency rates, and we’re normalizing.”
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