US Dollar Stays Weak Awaiting FOMC Rate Decision

Market Reviews

On currency markets, Japanese yen is trading as the strongest one. Canadian dollar is the weakest one for the week amid falling oil prices. US dollar is the second weakest awaiting FOMC rate statement. Australian dollar is trading as the third weakest one.

On stock markets, US stocks recovered mildly. DOW rose 0.35%, S&P 500 added 0.01%, NASDAQ gained 0.45%. In Asia, Nikkei lost 0.55%, Hong Kong HSI rose 0.16%, China Shanghai SSE fell 0.25%, Singapore Strait Times added 0.47%.

On other markets, US government debt yields fell, as investors fled riskier assets and geared up for a key Federal Reserve meeting. 5-year yield closed down 0.037 at 2.656. 10-year yield lost 0.032 to close at 2.825. 30-year yield fell 0.035 to 3.079. Yield curve is now inverted from 1-year (2.651) to 2-year (2.646) and 3-year (2.631).

The US central bank is widely expected to raise federal funds rate by 25bps to 2.25-2.50% today. It would be the fourth rate hike of the year and the ninth since the central bank began its current tightening cycle in December 2015. Meanwhile, expectations for further rate hikes in 2019 have dampened amid concerns of a potential slowdown in economic growth.

UK Prime Minister Theresa May’s spokesman said yesterday that the British government has begun full-scale preparations for the country's withdrawal from the European Union without a final agreement, implementing all existing emergency plans.

The Thomson Reuters/INSEAD Asian Business Sentiment Index rose to 63 in Q4, up from 58 in Q3 which was a near three year low. Australia Westpac leading index dropped -0.1% mom in November. Japan trade deficit widened to JPY -0.49% in November.