2023-12-14 09:05

Copyrighted Image by: Reuters Investing.com - The U.S. dollar fell close to four-month lows in early European trade Thursday after the Federal Reserve signaled rate cuts next year, with the European Central Bank and the Bank of England set to meet later in the session. At 04:05 ET (09:05 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.3% lower at 102.200, near its weakest level since mid-August. Fed signals rate cuts next year The U.S. central bank kept interest rates on hold at the conclusion of its two-day meeting on Wednesday, as widely expected, while its latest economic projections indicated its lengthy hiking cycle has ended and lower borrowing costs are coming in 2024. Additionally, Fed Chair Jerome Powell declined to push back against rate cut expectations, saying a discussion of cuts in borrowing costs is coming "into view." “In a somewhat surprising move, the Fed has acknowledged recent disinflation trends and poured gasoline on the fire of easing expectations for 2024,” said analysts at ING, in a note. Markets are now pricing in around a 75% chance of a rate cut in March, according to CME FedWatch tool, compared with 54% a week earlier. ECB, BOE up next Attention now turns to Europe, with rate decisions due later Thursday from the European Central Bank and the Bank of England, Norges Bank and Swiss National Bank. EUR/USD rose 0.2% to 1.0896, while GBP/USD rose 0.1% to 1.2636, with both the ECB and the BOE expected to keep interest rates unchanged as inflation remains above target. The focus will be on “to what degree the likes of the European Central Bank or the Bank of England do a better job than the Fed in pushing back against easing expectations for next year. If indeed they do a better job, it will only add to rallies in EUR/USD and GBP/USD,” ING added. The Norges Bank is considered to be the only bank that could potentially raise rates, but there is also a risk the SNB dials back its support for the Swiss franc in currency markets. Yen surges ahead of next week’s BOJ meeting In Asia, USD/JPY traded 0.8% lower to 141.69, with the Japanese yen climbing to an over four-month high against the dollar after the Fed comments. Markets were now awaiting a Bank of Japan meeting next week for more cues on monetary policy, although the BOJ is widely expected to maintain its ultra-dovish messaging. USD/CNY traded 0.5% lower at 7.1353, with the yuan trading close to a four-month high, although further gains in the currency were held back by persistent concerns over the Chinese economy. Markets were now awaiting more economic cues on China from industrial production and retail sales data due on Friday, after a string of disappointing readings for November. AUD/USD rose 0.5% to 0.6694, not far from an over a four-month high after strong employment data, while NZD/USD rose 0.3% to 0.6194, despite data showing the New Zealand economy unexpectedly contracted in the third quarter. https://www.investing.com/news/forex-news/dollar-slides-to-fourmonth-low-after-fed-singals-cuts-ahead-ecb-boe-up-next-3256211

2023-12-14 05:16

Copyrighted Image by: Reuters. Investing.com-- Gold prices rose above key levels in Asian trade on Thursday, extending gains from the prior session after the Federal Reserve said it was done raising interest rates and projected lower borrowing costs in 2024. The central bank kept rates on hold, as widely expected, and said it would likely cut interest rates by a bigger-than-expected margin in 2024, citing clear progress towards bringing inflation back within its 2% annual target. The move spurred widespread speculation over the potential timing of the Fed’s cuts, and also sparked steep losses in the dollar, which came close to a four-month low. Gold benefited from this trade, retaking the coveted $2,000 an ounce level as the prospect of lower U.S. interest rates pushed up the yellow metal’s appeal. Spot gold rose 0.2% to $2,031.88 an ounce, while gold futures expiring in February surged over 2% to $2,046.45 an ounce by 23:50 ET (04:50 GMT). Still, the yellow metal remained well below record highs of over $2,100 an ounce hit earlier this month, as markets remained uncertain over just when the Fed will begin trimming rates. Fed sings dovish, but timing of rate cuts unclear The Fed said that interest rates had now peaked at 5.4%, and that the central bank will cut rates at least thrice in 2024 to 4.6%. Fed Chair Powell said that while it was too soon to declare victory over inflation, he still projected a lower inflation outlook for 2023. The Fed’s dovish signaling sparked increased speculation over when the bank will begin cutting rates. Fed fund futures prices showed that traders were pricing in an over 70% chance the Fed will cut rates by 25 basis points in March 2024. Traders are also considering a 67% chance for another 25 basis point cut in May. But uncertainty over the rate cuts is likely to temper optimism in the coming months, especially as strength in the U.S. economy could still trigger increases in inflation. Recent data showed consumer price index inflation remained sticky in November, while the labor market also remained strong. Higher rates increase the opportunity cost of investing in gold, and had battered the yellow metal over the past year. While the prospect of lower rates also comes amid growing optimism over a soft landing for the U.S. economy, any further deteriorating in global economic conditions- particularly in Europe and China- could also spur safe haven demand for gold. Copper muted as China jitters dampen Fed optimism Among industrial metals, copper prices were flat on Thursday as persistent concerns over an economic slowdown in top importer China largely offset optimism over lower interest rates. Copper futures expiring March fell 0.1% to $3.8332 a pound. They were still sitting on a 1.3% rally from Wednesday, although this was largely due to a weaker dollar. Concerns over China remained in play following a string of weak economic readings for November, as markets feared a slowdown in copper demand. China slipped further into disinflation territory, while lending activity also remained languid. Focus is now on more economic signals from the country due this Friday- industrial production and retail sales. Upgrade your investing with our groundbreaking, AI-powered InvestingPro+ stock picks. Use coupon INVSPRO2024 to avail a limited time discount on our Pro and Pro+ subscription plans. Click here to know more, and don't forget to use the discount code when checking out! https://www.investing.com/news/commodities-news/gold-prices-soar-past-2000-as-fed-signals-2024-rate-cuts-3256152

2023-12-14 04:31

Copyrighted Image by: Reuters Investing.com-- Most Asian currencies rose sharply on Thursday, while the dollar came close to a four-month low after the Federal Reserve signaled it was done raising interest rates and will begin trimming borrowing costs in 2024. The central bank kept interest rates on hold as widely expected, and said it could potentially cut rates by a bigger-than-expected margin in 2024. Fed Chair Jerome Powell also flagged an acceptable amount of progress against inflation. His comments triggered steep losses in the dollar, with the dollar index and dollar index futures falling 0.3% each in Asian trade. Both instruments were close to their weakest levels since August, at around mid-to-low 102. Powell’s comments also triggered speculation over when the Fed will begin trimming rates. Fed fund futures show traders pricing in an over 70% chance for a 25 basis point rate cut in March 2024. Most Asian currencies shot up in the dollar’s wake, as the prospect of lower U.S. ramped up the appeal of risk-heavy, high-yielding assets. U.S. Treasury yields also slid after Wednesday's meeting. The Japanese yen surged 1% on Thursday to an over four-month high against the dollar. Markets were now awaiting a Bank of Japan meeting next week for more cues on monetary policy, although the BOJ is widely expected to maintain its ultra-dovish messaging. The Australian dollar rose 0.8% as data showed continued resilience in the labor force, although increased unemployment indicated some cooling after a strong run over the past year. Risk-heavy Asian currencies also saw outsized gains. The South Korean won added 1%, while the Philippine peso led gains in Southeast Asia with a 1% bounce. The Indian rupee was among the few outliers for the day, remaining close to record lows as India’s record-high trade deficit diminished its appeal. Chinese yuan rises, but gains testy amid economic jitters The Chinese yuan rose 0.6% and traded close to a four-month high, although further gains in the currency were held back by persistent concerns over the Chinese economy. Markets were now awaiting more economic cues on China from industrial production and retail sales data due on Friday, after a string of disappointing readings for November. After weak inflation data earlier this week, readings on Wednesday showed persistent weakness in lending activity and local liquidity levels. The readings spurred more calls for stimulus measures from Beijing, although the government has remained largely conservative in rolling out more fiscal support. Upgrade your investing with our groundbreaking, AI-powered InvestingPro+ stock picks. Use coupon INVSPRO2024 to avail a limited time discount on our Pro and Pro+ subscription plans. Click here to know more, and don't forget to use the discount code when checking out! https://www.investing.com/news/forex-news/asia-fx-surges-as-dollar-nears-4mth-low-on-dovish-fed-3256141

2023-12-14 03:06

Copyrighted Image by: Reuters Investing.com-- Most Asian stocks rose sharply on Thursday as the Federal Reserve said it was done raising interest rates and will consider cuts in 2024, although persistent concerns over an economic slowdown in China kept gains in check. Australia’s ASX 200 was among the top performers for the day, up 1.6% on strength in banks and commodity stocks. The ASX was also boosted by data showing continued resilience in Australia’s labor force, although the unemployment rate also rose slightly in November. South Korea’s KOSPI surged 1.1%, as technology stocks rose tracking an overnight slump in U.S. Treasury yields. This trade helped Hong Kong’s Hang Seng index add 0.9% despite weakness in mainland stocks. Broader Asian markets also rose after the Fed signaled an end to its rate hike cycle, and that it could cut rates by a bigger-than-expected margin in 2024. Traders were now once again pricing a greater chance that the Fed could trim rates by as soon as March 2024. A strong overnight close on Wall Street also provided positive cues to Asian markets, with the Dow Jones Industrial Average closing at a record high. The prospect of lower interest rates bodes well for Asian markets, given that it results in more foreign capital flows into the region. Risk-heavy assets, particularly stocks, benefit from a low rate environment. Futures for India’s Nifty 50 index pointed to a positive open, with the index likely to scale new peaks after hitting a series of record record highs over the past two weeks. Optimism over the Indian economy was a key driver of this rally. On the other hand, Japan’s Nikkei 225 index fell 0.6%, seeing some profit taking after three straight days of gains. While tech stocks clocked strong gains, they were offset by losses in automobile and industrial stocks, especially amid persistent concerns over a slowdown in China, which is a major export market for Japan. Chinese stocks lag amid caution before more economic cues China’s bluechip Shanghai Shenzhen CSI 300 hovered near five-year lows, while the Shanghai Composite also traded sideways. Sentiment towards China remained largely on edge after data earlier this week showed the country slipping further into deflationary territory in November. Focus is now on industrial production and retail sales data for November, due this Friday, for more cues on Asia’s biggest economy. Local markets took some support from local media reports stating that Beijing intended to loosen regulations for its National Social Security fund, allowing it to invest in pension products and certain options trade. But while the move is likely to boost capital markets, its impact on the economy will be limited. Chinese stock indexes were among the worst performers in Asia this year, hit by persistent concerns over the economy. Upgrade your investing with our groundbreaking, AI-powered InvestingPro+ stock picks. Use coupon INVSPRO2024 to avail a limited time discount on our Pro and Pro+ subscription plans. Click here to know more, and don't forget to use the discount code when checking out! https://www.investing.com/news/forex-news/asian-stocks-rally-on-fed-rate-cut-cheer-china-caution-persists-3256130

2023-12-14 02:01

Copyrighted Image by: Reuters. Investing.com -- Oil prices settled higher Thursday, buoyed by a Federal Reserve-induced slump in dollar and the International Energy Agency's brighter outlook for demand next year. By 14:30 ET (19.30 GMT), the U.S. crude futures settled 3% higher at $71.58 a barrel and the Brent contract climbed 3.2% to $71.58 a barrel. IEA lifts 2024 global oil demand forecast The crude market received a boost Thursday with the IEA raising its forecast for global oil consumption in its monthly report, saying it will rise by 1.1 million barrels per day, up 130,000 barrels a day from its previous forecast, citing an improvement in the outlook for the United States and lower oil prices. The monthly report from OPEC was also constructive, with the producing cartel estimating a tighter crude oil market for the fourth quarter of this year and 2024 as supply falls short of market demand if announced output cuts are maintained. The energy watchdog's improved forecasts come just a day after U.S. oil inventories fell by 4.3 million barrels in the week to Dec. 8, according to data from the Energy Information Administration on Wednesday, much more than 650,000 barrels expected. Weaker dollar helps support y market A sharp downturn in the dollar to fresh four-month lows, also supported oil prices amid expectations for the Fed to begin aggressively cutting rates next year. A lower greenback makes oil, which is priced in dollars, more attractive to foreign buyers. Following the Fed's dovish monetary policy update on Wednesday, which included a projection for at least three rate cuts next year, traders are now expecting the Fed to cut rates by more than 140 basis points next year. As well as denting the greenback, expectations for rate cuts also propped up expectations that the U.S. economy is likely to avoid a recession, likely keeping demand for energy intact. Middle East supply concerns remain in focus Crude prices also took some support from concerns over supply disruptions in the Middle East, after an attack on a tanker in the Red Sea. The incident was the latest in a string of attacks on U.S. and Israeli vessels in the area by Yemen-backed Houthi forces. The attack pushed up concerns over the spillover of a bigger conflict in the region, which could potentially disrupt supplies. But the Israel-Hamas war, which was the cause of increased tensions in the region, has so far had little impact on Middle Eastern oil supplies. Traders had steadily priced down a risk premium from the conflict over the past two months. https://www.investing.com/news/commodities-news/oil-prices-extend-rebound-amid-dovish-fed-cheer-huge-us-inventory-draw-3256123

2023-12-13 15:05

Crypto To Be Measured At Fair Value Under New FASB Rules - Bloomberg https://www.investing.com/news/cryptocurrency-news/crypto-to-be-measured-at-fair-value-under-new-fasb-rules--bloomberg-432SI-3255807