Dollar nurses painful losses in Asia

Dhaka,  Mon,  26 June 2017
Published : 16 Mar 2017, 14:25:31
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Dollar nurses painful losses in Asia

Dollar nurses painful losses in Asia
The dollar nursed painful losses in Asia on Thursday while sovereign bonds savored their biggest rally in nine months after the Federal Reserve hiked interest rates.

The euro got an added bonus when returns showed the anti-EU party of Geert Wilders won fewer seats than expected in Dutch elections.

The sigh of relief was heard across Asia as investors had feared faster U.S. hikes and more political upheaval in Europe could spook funds out of emerging markets.

Gold, copper and oil all rallied as the dollar dropped. 

The Fed lifted its funds rate by 25 basis points, as expected, to a range of 0.75 per cent to 1.00 per cent, but said further increases would only be "gradual."

Crucially, officials stuck to their outlook for two more hikes this year and three more in 2018, when many had expected an accelerated spate of moves.

Rather, the Fed said its inflation target was "symmetric," indicating that after a decade of below-target inflation it could tolerate a quicker pace of price rises.

That was painful news for bond bears who had built up huge short positions in Treasuries in anticipation of a hawkish Fed, according to Reuters.
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