By Gina Lee
Investing.com – The dollar was up on Thursday morning in Asia, with investor sentiment boosted in the wake of the U.S. Federal Reserve’s policy meeting.
The that tracks the greenback against a basket of other currencies was up 0.45% to 93.543 by 12:24 AM ET (5:24 AM GMT).
“With regard to interest rates, we now indicate that we expect it will be appropriate to maintain the current zero to 0.25% target range for the federal funds rates until labor market conditions have reached levels consistent with the committee’s assessments of maximum employment and inflation has risen to 2% and is on track to moderately exceed 2% for some time,” Fed Chairman Jerome Powell said on Wednesday, with the continuous tolerance for higher inflation pushing bond yields higher.
The greenback saw losses in the wake of the Fed’s comments and disappointing U.S. retail sales data, but slowly reversed after the Fed predicted economic growth to improve on the COVID-19 influenced drop in June’s projections.
“The dollar shifted a little, but the market overall did not show a huge reaction,” Barclays (LON:) senior strategist Shinichiro Kadota told Reuters.
Powell will testify before the U.S. House of Representatives’ Select Subcommittee on the Coronavirus Crisis on September 23, where he will expound on the Fed’s response to COVID-19.
The pair edged up 0.12% to 105.07. The Bank of Japan will keep its monetary policy steady as it handed down its decision earlier in the day, as well as upgrading its economic outlook slightly and putting paid to further stimulus measures to combat COVID-19.
Investors will be watching to see how the central bank will work with newly elected Prime Minister Yoshihide Suga, who is widely expected to continue predecessor Shinzo Abe’s Abenomics policy.
The pair was down 0.54% to 0.7266, with released earlier in the day showing a better-than-expected 111,000 surge year-on-year in August, but also a drop in the jobless rate to 6.8% from July’s 7.5%. Across the Tasman Sea, the pair fell 0.64% to 0.6688. New Zealand reported a record slump in the second quarter earlier in the day, with gross domestic product falling 12.2% and 12.4% respectively.
The pair was up 0.36% to 6.7775.
The pair fell 0.37% to 1.2918. Brexit tensions continue to be a focus for the pound, with the Tories striking a deal on Wednesday, avoiding a revolt within Prime Minister Boris Johnson’s party and giving Parliament a say over how to use post-Brexit powers.
The Bank of England will hand down its policy decision later in the day and is widely expected to introduce further stimulus measures into the COVID-19-hit economy.
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