Market Review - 29/10/2014 22:41GMT
U.S. dollar rises broadly after FOMC rate decision
U.S. dollar rose broadly against major currencies on Wednesday after FOMC rate decision as the Federal Reserve ended its monthly bond purchase program.
Despite euro's brief rise to 1.2770 on active short-covering in New York morning on Wednesday, the single currency nose-dived to as low as 1.2634 due to dollar's broad-based strength after FOMC rate decision and Fed's highly accommodative stance. Fed dropped a characterization of U.S. labor market slack as "significant" in a show of confidence in the economy's prospects.The yield on the benchmark 10-year U.S. Treasury note hit a three-week peak and interest rate futures shifted to show better-than-even odds of a rate increase in September 2015 after the FOMC rate decision.
Minneapolis Fed President Narayana Kocherlakota was the only one who broke ranks, arguing for the committee to make a bolder commitment to meet its 2 percent inflation target given a lack of price pressures.
The Fed acknowledged lower energy prices and other forces were holding inflation down, but repeated its view that the likelihood of inflation undershooting its target had diminished since earlier this year. The Fed will continue reinvesting the proceeds of securities that mature each month, meaning its more than $4 trillion balance sheet will remain intact for the time being.
Despite dollar's brief retreat to 107.95 in Europe on Wednesday, the greenback jumped after FOMC rate decision n its highly accommodative stance. The pair rallied to as high as 108.95 on dollar's broad-based strength.
Cable briefly rose to 1.6161 in New York morning in tandem with euro on Wednesday, however, the British pound later tumbled sharply after FOMC rate decision and the pair nose-dived to as low as 1.6003 near New York close.
Thursday will see the release of RBNZ rate decision, Australia's HIA new home sales, import and export prices, U.K. Nationwide house prices, Swiss KOF indicator, German unemployment rate, EU business climate, economic sentiment and final consumer confidence, U.S. jobless claims, GDP in Q3 and core PCE, German CPI and HICP.
U.S. dollar rises broadly after FOMC rate decision
U.S. dollar rose broadly against major currencies on Wednesday after FOMC rate decision as the Federal Reserve ended its monthly bond purchase program.
Despite euro's brief rise to 1.2770 on active short-covering in New York morning on Wednesday, the single currency nose-dived to as low as 1.2634 due to dollar's broad-based strength after FOMC rate decision and Fed's highly accommodative stance. Fed dropped a characterization of U.S. labor market slack as "significant" in a show of confidence in the economy's prospects.The yield on the benchmark 10-year U.S. Treasury note hit a three-week peak and interest rate futures shifted to show better-than-even odds of a rate increase in September 2015 after the FOMC rate decision.
Minneapolis Fed President Narayana Kocherlakota was the only one who broke ranks, arguing for the committee to make a bolder commitment to meet its 2 percent inflation target given a lack of price pressures.
The Fed acknowledged lower energy prices and other forces were holding inflation down, but repeated its view that the likelihood of inflation undershooting its target had diminished since earlier this year. The Fed will continue reinvesting the proceeds of securities that mature each month, meaning its more than $4 trillion balance sheet will remain intact for the time being.
Despite dollar's brief retreat to 107.95 in Europe on Wednesday, the greenback jumped after FOMC rate decision n its highly accommodative stance. The pair rallied to as high as 108.95 on dollar's broad-based strength.
Cable briefly rose to 1.6161 in New York morning in tandem with euro on Wednesday, however, the British pound later tumbled sharply after FOMC rate decision and the pair nose-dived to as low as 1.6003 near New York close.
Thursday will see the release of RBNZ rate decision, Australia's HIA new home sales, import and export prices, U.K. Nationwide house prices, Swiss KOF indicator, German unemployment rate, EU business climate, economic sentiment and final consumer confidence, U.S. jobless claims, GDP in Q3 and core PCE, German CPI and HICP.
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