The Guardian
Email YouTube Facebook Instagram Twitter WhatsApp

Dollar drops before US federal reserve policy, after Alabama poll

Related

dollar

The dollar dropped Wednesday awaiting the outcome of the Federal Reserve’s latest policy meeting and after a shock Democrat poll win in a staunchly Republican senate seat fuelled fears about US President Donald Trump’s tax cut plans.

European stock markets were slightly lower after Tokyo closed down, as investors also looked ahead to central bank policy announcements due Thursday from both the European Central Bank and the Bank of England.

Official data Wednesday showed British unemployment remaining at a 42-year low level of 4.3 percent.

In New York on Tuesday, the Dow and S&P 500 indices clocked up fresh record highs, lifted by share price gains for financials ahead of the expected interest rate hike by the Fed on Wednesday.

Bloomberg News reported Republican senators as saying lawmakers in both houses of Congress were making progress in reconciling two tax reform bills and a final draft could be agreed imminently and it could go to a vote by next Tuesday.

Bets on the market-friendly tax cuts being introduced helped drive a surge in global markets this year and while equities have stuttered in recent weeks analysts suggested more gains could come.

However, Doug Jones’ victory over the controversial Roy Moore in the usually deep-red Alabama senate vote cut the Republicans’ majority to 51-49, meaning any wavering could see them fail to push the tax cuts through.

That sent the dollar falling Wednesday against the euro, yen and sterling.

“We could be in for a brush of bad news for the dollar with the latest Alabama election results shifting to Democrat Doug Jones,” said Stephen Innes, head of Asia-Pacific trading at OANDA.

Traders are awaiting the end of the Fed’s two-day meeting, which is widely expected to see the central bank lift borrowing costs again, though the crucial event is outgoing chair Janet Yellen’s statement.

Market watchers will be dissecting her comments for signals about more rate rises next year.

– Bitcoin retreats –
Elsewhere Wednesday, bitcoin dropped to $16,685.50 from $17,247.64 late in New York on Tuesday, according to Bloomberg, following this month’s stratospheric rise to multiple records.

However, while there are warnings of a massive bubble bursting, some analysts say the digital unit could continue to rally, having already increased 20-fold this year.

“Bitcoin has fixed supply and growing demand,” noted Greg McKenna, market strategist at AxiTrader.

“Think of it less as a currency and more as a stock which has a fixed supply of shares on issue and increasing demand. What happens then? Prices rise.”

The unit debuted on a major exchange at the weekend, with futures contracts on the unit appearing on the Chicago Board Options Exchange, while it is also expected to list on the rival Chicago Mercantile Exchange next week.

Oil prices meanwhile jumped before US weekly energy inventory data due Wednesday.

– Key figures around 1000 GMT –
London – FTSE 100: FLAT at 7,503.56 points

Paris – CAC 40: DOWN 0.1 percent at 5,423.56

Frankfurt – DAX 30: DOWN 0.1 percent at 13,168.8

EURO STOXX 50: DOWN 0.1 percent at 3,596.80

Tokyo – Nikkei 225: DOWN 0.5 percent at 22,758.07 (close)

Hong Kong – Hang Seng: UP 1.5 percent at 29,222.10 (close)

Shanghai – Composite: UP 0.7 percent at 3,303.04 (close)

New York – DOW: UP 0.5 percent at 24,504.80 (close)

Euro/dollar: UP at $1.1749 from $1.1742 at 2200 GMT

Pound/dollar: UP at $1.3349 from $1.3316

Dollar/yen: DOWN at 113.39 yen from 113.56 yen

Oil – Brent North Sea: UP 88 cents at $64.22 per barrel

Oil – West Texas Intermediate: UP 50 cents at $57.64


In this article:
DollarDonald Trump
Receive News Alerts on Whatsapp: +2348136370421

No comments yet