Dollar Shaky on Fed Comments, Asian Stocks Snap Winning Streak
The U.S. dollar was struggling on Thursday after the release of Federal Reserve minutes which showed that the U.S. central bank may pause its interest rate tightening agenda this year. The minutes from the Federal Open Market Committee meeting on December 18-19 publicized that several Fed members are in favor of keeping interest rates steady in 2019. Specifically, Fed members acknowledged that upcoming policy is “less clear” after they approved an interest rate hike in their last meeting. The minutes showed that some Fed members were concerned about the last rate hike.
In response to these minutes, traders have been favoring riskier assets, including the Canadian dollar, which is now trading near a one-month peak. The dollar index was down 0.13 percent as of 2:06 p.m. HK/SIN, to 95.09 .DXY, after dipping 0.7 percent on Wednesday. The dollar was down 0.22 percent against the yen to 107.93. The euro soared 0.14 percent against the greenback, to trade at $1.1558. According to the most recent poll released by Reuters, two-thirds of currency strategists polled expect that a reduction in interest rate hikes will thwart the dollar’s rise against its primary trading partners. Though 2018 was the best year for the dollar since 2015, the greenback’s growth has already slowed in the new year in light of slower rate hike expectations.
Asian Market Movements
Wall Street rallied for the fourth consecutive day on Wednesday, but Asian markets weren’t able to cash in on the upswing on Thursday. Japan’s Nikkei 225 snapped its winning streak from the past few days and was trading down 1.27percent in the mid-afternoon on Thursday. South Korea’s Kospi was also trading lower, down a modest 0.09 percent. All other major Asian indexes were trading in positive territory, though without the wide movements seen in the past few trading sessions. The Shanghai Composite was up 0.05 percent, South Korea’s Hang Seng Index was up 0.10 percent, and the Shenzhen Composite was up 0.22 percent.