Asian markets were broadly higher on Thursday morning, following Wall Street and responding notably to the Federal Reserve’s announcement on Wednesday after their two-day policy meeting. As expected, the Fed kept interest rates stable and gave hints to its upcoming policy regarding inflation, saying it expects to start winding down its holdings of bonds “relatively soon,” giving analysts an expectation of a September launch for the program. This fiscal tightening could actually reduce the need for further rate hikes in the near future.
MSCI’s broadest index of shares outside Japan rose 0.5 percent in early trade to levels not reached since January 2008. The index is up nearly 5 percent this month alone. South Korea’s Kospi was up 0.6 percent and Australia’s ASX 200 gained 0.2 percent. Japan’s Nikkei 225 which started the day flat gained 0.12 percent as of 10:29 a.m. HK/SIN.
The Other Side of the Coin
While indices were higher during Thursday’s Asian session, oil prices snapped their three-day winning streak but still hovered near eight-week highs. Brent crude futures were down 0.26 percent to $50.84 per barrel and U.S. WTI futures were down 0.27 percent to $48.62 per barrel.
The dollar also continued its struggle on Thursday morning, trading lower against most of its most common trading partners. The euro remained near 23-month highs, trading at $1.174. The dollar also eased against the yen, down 0.19 percent to 110.94. The greenback was also lower against the Canadian dollar, the British pound and the Australian dollar. The dollar index was at 93.44, a 10 percent loss since hitting a 14-year high in early January of this year. Spot gold moved higher due to the lower dollar, trading near six-week highs and copper hit 26-month highs.