Fed raises US rates, forecasts one more increase this year
- Author: Zachary Reyes Jun 15, 2017,
Jun 15, 2017, 20:30
The pound has hovered near the $1.27 mark after a near 3 percent fall in the wake of Britain's election last week, which produced a "hung" parliament - no clear majority for any party.
The yen rose 0.2 percent to 109.33 per dollar as of 7:55 a.m.in Tokyo, after climbing 0.5 percent Wednesday.
Added to another cautious recovery for sterling, that left the dollar index 0.04 percent weaker on the day at 96.936. Fed Chair Janet Yellen stated her view in a press conference that the economy appears strong enough to withstand additional rate hikes, barring new indications of economic weakness.
The US jobless rate fell to a 16-year low last month.
European stocks dropped to their lowest in almost two months Thursday, rattled as investors questioned the Federal Reserve's outlook for monetary policy as signs of flagging consumer demand have cropped up, MarketWatch reports.
The dollar inched higher against a basket of peers, after the Federal Reserve's policy meeting kept up expectations of another interest rate hike this year.
An agreement on debt relief is a pre-requisite for the International Monetary Fund to participate in a deal for Greece, which in turn would pave the way for the European Central Bank to involve Greek government debt in its asset purchase scheme.
In a post-meeting statement, the central bank's Federal Open Market Committee (FOMC) said that on a 12-month basis, inflation has declined and, like the measure excluding food and energy prices, is running somewhat below 2 percent.
Asia-Pacific stocks traded lower as investors took profits in the wake of the U.S. rate decision, with the Nikkei 225 trading down 0.26 percent and the Hang Seng down 1.20 percent (0952GMT). Shanghai's Composite index edged 0.1 percent lower to 3,128.29 and the S&P ASX 200 in Australia tumbled 1.1 percent to 5,770.90.
Risk sentiment was also hit by fear of more USA political turmoil after the Washington Post reported that Trump is being investigated by special counsel Robert Mueller for possible obstruction of justice.
Crude oil prices were listless after having slumped almost 4 percent to their lowest close in seven months on Wednesday, on an unexpected large build in gasoline inventories. Benchmark U.S. crude fell another 22 cents to $44.51 a barrel in electronic trading on the New York Mercantile Exchange.
Brent crude, the worldwide benchmark, was down 12 cents a barrel at $46.88.
The decision to increase #Interest Rates from 1 percent to 1.25 percent was as a result of improved labor market conditions.
The euro traded at $1.1220, after scaling a seven-month high of $1.1296. Notably, the Fed sees one more rate hike by end of the year and three more rate hikes in 2018 to reflect economic growth, it expects to start shrinking its balance sheet this year.
Even with signs that inflation is on the decline, the US central bank chose to raise its benchmark interest rate by a quarter percentage point, from one percent to one-and-a-quarter.