Dollar slips back against euro after Fed-fuelled gains

Friday, 22 Sep, 2017

The Russell 2000 index of smaller-company stocks added 5.02 points, or 0.4 percent, to 1,445.42.

The dollar fell to around ¥111.40 in Tokyo trading on Wednesday, dragged down by position-adjustment selling before the announcement of the U.S. Federal Reserve's monetary policy decision later in the day.

Earlier, the New Zealand dollar hit its strongest in more than a month at $0.7374 after a poll showed the ruling National Party regaining a wide lead over the opposition before Saturday's election. What is surprising was the Fed's upbeat tone on the US economy despite two major hurricanes that just hit the USA mainland. The latest data increased the odds that the Bank of England was going to hike interest rates at its next meeting on November 2.

The S&P 5000 index closed higher boosting the Wall Street's gains on Monday (9/19/2017).

Inflation - a key gauge for policymakers use to decide whether to tap the economy's brakes by lifting interest rates - also remains below the Fed's 2 percent target.

The Nikkei has gained almost 30 percent since Abe attained political power in late 2012. That was the index's fourth consecutive record high. The index jumped to 87.9 from 86.7 off the back of recent solid growth figures for the second quarter and an increase in investment activities.

That will all be on display Wednesday when the Fed's policy committee announces its next moves and Yellen holds a press conference.

Also weighing on Australian stocks but helping those in Japan was a jump in the USA dollar which dragged down metals prices. The move reflects a strengthened economy and could mean higher rates on mortgages and other loans over time. The market participants will be listening for any indications or fresh hints on the chances of another rate rise this year and how many could be expected in 2018.

In currencies, the Australian dollar was steady at $0.7932 after sliding 1.2 percent the previous day to touch a three-week low of $0.7919. The Dow Jones Industrial Average rose 0.28% to 22,331.35 points, the S&P 500 gained 0.15% to 2,503.87 points and the Nasdaq Composite added 0.1% to 6,454.64 points. Tata shares rose 1.7 percent. Kraft Heinz fell 1.2 percent. Benchmark U.S. crude shed 51 cents to trade at $50.18 a barrel in electronic trading on the New York Mercantile Exchange, while Brent crude, used to price global oils, dropped 43 cents to $56.86 a barrel in London.

United States crude oil prices rose above $50 per barrel yesterday and were near last week's multi-month highs as the number of United States rigs drilling for new production fell and refineries continued to restart after getting knocked out by Hurricane Harvey.