Wall Street to open higher on Fed's 'gradual' rate-hike outlook
- Author: Ronnie Bowen Mar 19, 2017,
Mar 19, 2017, 0:58
The euro has lost about 4% of its value against the dollar since October, when markets started betting on tighter monetary policy in the U.S. This is a sign that the Fed's decisions are likely to keep driving the single currency, because policy makers at the European Central Bank are unlikely to follow suit in the near term. The Nasdaq composite slipped 3 points, or 0.1%, to 5,897.
The euro was also buoyed by a Dutch election defeat for far-right leader Geert Wilders which eased broader fears of a populist drift in European polls this year. Some investors had begun to speculate that four increases may be possible given how much the economy and inflation have picked up.
"It was a well-prepared hike, and when you consider the fact that Yellen and Co kept the outlook for growth and inflation largely unchanged, I would call this a dovish hike", said DZ Bank analyst Rene Albrecht, in Frankfurt. The financial index was the S&P's strongest sector, rebounding from Wednesday's decline while utilities - often used as a proxy for bonds - were its weakest link as benchmark 10-year Treasury note yields rose.
A Wall Street sign in front of the New York Stock Exchange in the Manhattan borough of New York January 27, 2015. Wilders, like Marine Le Pen in France (http://www.marketwatch.com/story/is-frexit-next-why-france-is-starting-to-really-freak-out-investors-2017-02-07), has expressed an interest in the Netherlands leaving the European Union, something that caused widespread volatility when the United Kingdom voted to do so in June.
"The market is not sure about the timing of a rate hike in the future".
Oracle surged to a record high of $46.99 and was last up 6.7 percent at $45.93 after the business software maker issued a better-than-expected quarterly profit. USA gold futures for April delivery settled up 2.2 percent at $1,227.10. Meanwhile, Sydney's S&P-ASX 200 rose 0.2%.
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U.S. Treasury yields, which slid after the decision, staged a recovery on Thursday and continued to rise on Friday.
Oil prices rebounded after the International Energy Agency said in its latest monthly report that OPEC crude producing nations were complying with a landmark deal to curb a global supply glut.
Gold is highly sensitive to rising USA interest rates, as these increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced. It was the eighth drop in the last nine days.
At German lender Commerzbank AG, currency analyst Antje Praefcke also said that "the euro seemed unimpressed" Thursday, but warned that the euro remains vulnerable because "political risks in the eurozone remain high with a view to the French elections".
The dollar was steady at 113.32 yen JPY= but is on track to post a 1.2 percent loss for the week.