The minutes from the latest Federal Reserve meeting were released on Wednesday, and they showed that the U.S. economic policymakers remain committed to raising interest rates despite President Trump’s vehement opposition. Just last week President Trump referred to the Fed as “ridiculous”. Still, despite pressure from POTUS, every policymaker in the Federal Reserve supported the September rate hike, the minutes showed. They also anticipated additional increases in the near term, with a possibility that the next rate hike could be as early as December.
The hawkish minutes sent the dollar higher, to a new one-week high on Thursday. The dollar index was trading up 0.09 percent as of 1:22 p.m. HK/SIN, to 95.67 .DXY. The greenback eased against the yen, trading down 0.12 percent to 112.51. However, it gained against the British pound and the euro, and was up 0.22 percent against the Canadian dollar.
U.S. Treasury yields continued their climb after the minutes were released, gaining 3 basis points to 3.184 percent.
Stock Market Movements
Global stock markets were broadly lower on Thursday after huge rallies earlier in the week. The Shanghai Composite and the Shenzhen Composite were both down as much as 1.80 percent in the early afternoon in Asia, pressured by continued concerns about China’s trade war with the United States. The U.S. government held back yesterday from referring to China as a ‘currency manipulator’, but it did issue other scathing words. A report released by the U.S. Treasury Department said that the latest devaluation of the Chinese yuan will exacerbate the U.S. trade deficit, but that Beijing remains unwilling to intervene in the yuan’s valuation. U.S. Treasury Secretary Steven Mnuchin expressed concern about China’s lack of currency transparency as well as the yuan’s weakness.
In other regions, the Hang Seng Index was down 0.30 percent, the Nikkei was down 0.64 percent and the Kospi was 0.74 percent lower. All the Asian slides followed declines on Wall street on Wednesday.