Dollar slips, Asian stocks boosted as Fed holds rates – AFP

dollar to naira

The dollar came under fresh pressure in Asia on Thursday after the Federal Reserve decided against lifting interest rates but the prospect of cheap cash for longer sparked another rally in regional equity markets.

At the end of one of its most anticipated meetings for some time, the central bank’s policymakers said the economy continued to improve and the argument for a rise was strengthening but more evidence of sustained progress was needed.

However, while they lowered their growth forecast for this year, the policy committee said the rebound would continue through the second half, and suggested borrowing costs could rise before the end of the year.

The decision to stick to the easy money policy for the time being came hours after the Bank of Japan overhauled its own stimulus programme to target inflation and held off cutting interest rates further into negative territory.

Wednesday’s announcements helped soothe recent investor concerns that the age of cheap cash — which has supported markets for years — could be coming to an end, fuelling talk of an equity correction.

“With both the BoJ and the US Fed doing nothing to upset the apple cart, the markets got what they wanted. And after selling off, have now bounced and look good technically,” Chris Conway, head of research at Australian Stock Report, said.

– Hanjin steams ahead –
Traders sold off the dollar as they looked for currencies with better, if riskier, returns.

The South Korean won soared 1.6 percent against the greenback while the Indonesian rupiah climbed 0.3 percent and the Australian dollar rallied 0.7 percent. Malaysia’s ringgit jumped 0.8 percent while the Singapore dollar put on 0.6 percent.

The greenback rose against the yen, having fallen earlier in the day, buying 100.70 yen. The euro and pound extended gains.

Asian equity markets built on the previous day’s Japan-fuelled strong performance.

Hong Kong added 0.4 percent by close, with traders in the city especially cheered as its monetary policy is linked to that of the United States.

Shanghai added 0.5 percent by the close, Sydney rose 0.7 percent and Wellington put on 0.4 percent. Manila, Bangkok and Jakarta also saw strong gains.

Tokyo was closed for a public holiday.

Seoul surged 0.7 percent, with troubled Hanjin Shipping the stand-out performer, piling on almost 30 percent after its largest shareholder agreed to provide emergency cash to prevent it from going under.

The board of Korean Air Lines approved a 60 billion won (US$54 million) loan late Wednesday — part of a 100 billion won emergency fund earlier pledged by the Hanjin Group, the parent of Hanjin Shipping and Korean Air.

Korean Air end up 5.8 percent.

– Key figures around 0800 GMT –
Hong Kong – Hang Seng: UP 0.4 percent at 23,759.80 (close)

Shanghai – Composite: UP 0.5 percent at 3,042.31 (close)

Tokyo – Nikkei 225: Closed for a public holiday

Dollar/yen: UP at 100.70 yen from 100.30 yen

Euro/dollar: UP at $1.1239 from $1.1189

Pound/dollar: UP at $1.3069 from $1.3033

New York – DOW: UP 0.9 percent at 18,293.70 (close)

London – FTSE 100: UP 0.6 percent at 6,879.67 (open)