An element of cheer has returned to the market after Wednesday’s rate announcement and commentary from the Federal Reserve. While the fed held off on a rate rise as expected they dropped language outlining the concerns that turmoil in emerging and global financial markets posed for US economic growth and strongly signalled that a December rate rise was certainly not off the table. Responding to this news we have seen a return to levity as global stock indices and the greenback move upward.
Zeroing in on Asia, the yen’s status as a safe haven currency hasn’t been a hindrance even as the shift in sentiment has favoured riskier assets as the yen posts gains relative the big dollar ahead of the BoJ’s policy meeting tomorrow. Similarly, we have seen a return to strength in the aussie and kiwi dollars after the AUD took a knock versus the greenback due to weaker than expected inflation. Currently both currencies are benefiting from a relative lift in commodity prices and in New Zealand’s case a decision on the part of central banker’s to maintain interest rates as is.
Read the rest of the article Greenback moves up following the Fed’s rate statement