Precise Investors Editorial Team
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.2%
The U.S. dollar was on the defensive and shares dropped on Wednesday.
The euro soared to a four-year high against the U.S. currency in the prior session on rate cut bets, while oil remained firm.
The U.S. central bank is expected to cut its benchmark interest rate by a quarter of a percentage point to the 4.00%-4.25% range at the end of its monetary policy meeting later in the day. The main focus beyond the rate decision will be on Chair Jerome Powell’s comments on the outlook for monetary policy.
Markets are effectively daring the bank to over-deliver on the dovish side, said Dilin Wu, research strategist at Pepperstone. The bigger question, though, is whether Powell can satisfy markets already leaning heavily on a dovish view, or whether conditions are ripe for a near-term shakeout in both USD and gold positioning.
The dollar index, which tracks the currency against a range of currencies of other major trading partners, edged up 0.1% to 96.689 after a 0.7% decline on Tuesday to the lowest since early July.
The European single currency was down 0.1% at $1.1857, after hitting $1.1867 on Tuesday, its highest level since September 2021. The dollar was little changed at 146.52 yen following a 0.6% drop in the previous session.
If the Fed chair is more dovish than expected, of course, you would expect that to weigh on the dollar, but really, how much more bearish can you get from here? Mahjabeen Zaman, the head of foreign exchange research at ANZ, said on a podcast. We’ve already got more than five cuts priced in for the cycle.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.2%.
Nikkei stock index slipped 0.1% after a record close on Tuesday.
European and U.S. stock futures were firmer after a largely soft cash session overnight.
The pan-region Euro Stoxx 50 futures were up 0.35%, German DAX futures added 0.4% and FTSE futures gained 0.2%.
U.S. stock futures, the S&P 500 e-minis, crept up 0.1%.
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