Sep 25, 2023: Most Asian currencies moved in a flat-to-low range on Monday, remaining under pressure from the prospect of higher-for-longer U.S. interest rates, while the dollar steadied near six-month peaks. Regional currencies were hit hard by hawkish messaging from the Federal Reserve last week, as the central bank warned that a recent resurgence in inflation was expected to potentially invite more rate hikes. The central bank also said that interest rates will remain higher for longer- a trend that heralds more pressure on Asian currencies, as the gap between risky and low-risk yields narrows. The dollar index and dollar…
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Sep 25, 2023: The yen approached the closely watched 150 per dollar level on Monday and kept traders on intervention watch after the Bank of Japan and Governor Kazuo Ueda quashed hopes of any imminent move away from its stark ultra-loose monetary policy. In the broader currency market, the dollar was on the front foot, extending its gains from last week after a still-hawkish Federal Reserve surprised markets by signalling U.S. rates would need to stay higher for longer than initially expected. The yen fell to a more than 10-month low of 148.49 per dollar and remained within striking distance…
Sep 22, 2023: Most Asian stocks moved in a flat-to-low range on Friday as markets continued to fret over rising interest rates, while Japan’s Nikkei trimmed some early losses after the Bank of Japan offered no changes to its ultra-dovish policy. Regional markets were still reeling from a more hawkish than expected tone struck by the Federal Reserve this week, as the central bank warned that interest rates will remain higher for longer. The European Central Bank and Bank of England also offered similar warnings, denting risk-driven assets across the globe. Higher rates limit the flow of foreign capital into…
Sep 22, 2023: The Bank of Japan held interest rates at negative levels as widely expected on Friday, and said that it will continue with its current pace of asset purchases and yield curve control to stimulate the economy. The BOJ left its short-term interest rates at negative 0.1%, and said it will continue with monetary easing in the near-term to improve wage growth and buoy inflation levels. The bank said it will maintain its current pace of yield curve control (YCC) by allowing bond yields to fluctuate in a range of 0.5% to negative 0.5%. But the bank was…
Sep 22, 2023: Gold prices rose slightly on Friday, taking some relief as the dollar retreated from a six-month high, although the prospect of higher-for-longer interest rates, following a hawkish stance from the Federal Reserve, presented a weak outlook. The yellow metal was also set for a muted weekly performance, having caught few bids amid growing concerns over rising interest rates. Gold futures in particular saw wild swings this week as markets adjusted their outlook for the yellow metal in the face of higher U.S. rates. The most-trade gold futures contract on the Comex, expiring in December, rose 0.2% on…
Sep 22, 2023: Most Asian currencies moved little on Friday as markets continued to fret over higher U.S. interest rates, while the yen came close to 10-month lows after the Bank of Japan maintained its ultra-dovish policy. The dollar remained relatively well-bid in Asian trade, recovering a measure of overnight losses. The dollar index and dollar index futures rose about 0.1% each, and remained within sight of a six-month high hit earlier this week. Yen weakens as BOJ reiterates dovish stanceThe Japanese yen fell 0.4% to 148.16 against the dollar, and was trading just shy of its weakest levels since…
Sep 22, 2023: British retail sales were 0.4% higher in August than in a rain-soaked July, figures from the Office for National Statistics showed on Friday, adding to signs that the country’s consumers were mostly coping with the cost-of-living squeeze. Economists polled by Reuters had forecast that sales volumes would rise by 0.5% on the month in August after a sharp 1.1% month-on-month fall in July. While sales overall remained subdued, the partial recovery was driven by food sales and a strong month for clothing, Heather Bovill, deputy director for surveys and economic indicators at the Office for National Statistics…
Sep 22, 2023: Turkey’s central bank raised its key interest rate by a lofty 500 basis points to 30% on Thursday, marking a second month of aggressive tightening after President Tayyip Erdogan set aside his long opposition to tight policy. The bank reiterated it is ready to raise rates further as needed to rein in inflation that leapt to nearly 59% in August and is expected to rise into next year. It has hiked rates by 2,150 basis points since June. The lira slipped to 27.105 to the dollar after the decision, just shy of its all-time low touched last…
Sep 21, 2023: The pound and Swiss franc tumbled on Thursday after the British and Swiss central banks kept rates unchanged, while the dollar hit a 6-1/2 month high after the U.S. Federal Reserve signalled policy would remain restrictive for longer. The yen, meanwhile, was at its lowest since November before Friday’s Bank of Japan policy announcement, while central banks in Sweden and Norway both met expectations for 25 basis point rate rises. The Bank of England halted a run of 14 consecutive rate hikes by voting with a narrow 5-4 margin to keep its Bank Rate at 5.25%, the…
Sep 21, 2023: Most Asian stocks sank on Thursday as the prospect of higher U.S. interest rates crimped the appeal of risk-driven assets, with focus now turning to more upcoming central bank rate decisions in the region. Technology stocks were the worst hit, tracking overnight declines in their U.S. peers after the Federal Reserve held interest rates as expected, but warned that sticky inflation was likely to attract at least one more interest rate hike this year. The central bank also said that interest rates will likely fall by a smaller-than-expected margin in 2024. The prospect of higher U.S. rates…
