Published: Sat, September 23, 2017
Money | By Armando Alvarado

Dollar edges lower before Fed statement

Dollar edges lower before Fed statement

The US Federal Reserve left interest rates unchanged on Wednesday but signaled it still expects one more increase by the end of the year despite a recent bout of low inflation. Shanghai lost 0.2 percent while Hong Kong's Hang Seng added 0.2 percent. Healthcare stocks rose 0.3 percent.

Gold for December delivery closed down less than 0.1% at $1,310.60 a troy ounce on the Comex division of the New York Mercantile Exchange.

Emerging markets shares were lower, with an index of emerging markets falling 0.4 percent. "The Fed took another step on its path of handsome normalization, announcing that the gradual balance sheet reduction will start next month and limiting revisions to both projections and policy guidance", said Mohamed El-Erian, Chief Economic Adviser at Allianz, in California, as quoted by Reuters. "The Fed stuck to its guns that rates are going higher and balance sheet reduction is around the corner".

INVESTOR INSIGHT: "Even now, despite the Fed effectively forecasting four rate hikes before the end of next year, markets are pricing in only one or two and even then, unconvincingly", said Craig Erlam, senior market analyst at OANDA. The U.S. dollar strengthened against the Japanese yen on Thursday as increasing prospects of a December rate hike by the Federal Reserve curbed appetite for safe-haven assets.

She also said if prices rose too quickly the bank would be able to lift rates quicker.

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Bluecrest Capital Management Ltd bought 40,710 shares as the company's stock declined 14.33% while stock markets rallied. Several hedge funds and other institutional investors have recently added to or reduced their stakes in the company.

The central bank said Hurricanes Harvey, Irma, and Maris were expected to affect USA economy in the near term, while they would not alter the course of the economy in the medium term.

The index that measures the greenback's strength against a basket of peers, was up 0.1 percent on the day at 92.558 after hitting its highest level in two weeks in the wake of the Fed meeting. The US currency, meanwhile, was flat against the yen at 111.53. In his speech, Trump warned that the United States will be forced to "totally destroy" North Korea unless Pyongyang backs down from its nuclear program, but the criticism was not enough to spook investors. More recently, the North launched a missile that passed over Japan on September 15 local time. US stocks were poised for a steady opening with Dow futures and the broader S&P 500 futures unchanged. While Bain had brought SK Hynix in on the deal, Toshiba did not mention the South Korean chip maker in its announcement, Reuters reported. Toshiba indicated last week it had entered into a memorandum of understanding with Bain Capital, which backed a separate group bidding for the unit, over the sale. It was last up 0.06 percent at 112.52 yen.

Tuesday marked the start of a two-day meeting of the USA central bank. It's set to make its interest rate decision on Thursday.

ENERGY: Oil futures snapped their rally.

The Japanese yen depreciated 0.22 percent against the U.S. dollar at midday on Thursday. The US dollar increased to 0.9625 Swiss franc from 0.9614 Swiss franc, and it moved down to 1.2272 Canadian dollars from 1.2307 Canadian dollars.

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